Inflation: PMEAC expects RBI measures very soon
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Last Updated: Tuesday, December 15, 2009, 22:19
  
New Delhi: The Prime Minister's economic panel on Tuesday said inflation is likely to cross RBI's projection and the central bank may take actions in December itself.

"By the end of March 2010, it (inflation) could be close to seven per cent," Prime Minister's Economic Advisory Council chairman C Rangarajan told reporters on the sidelines of a summit here on Tuesday.

In its October policy review, the Reserve Bank had raised its projection for inflation at the end of March to 6.5 percent from its earlier view of five percent.

"Usually there is a seasonal decline... but certainly it appears that inflation by end of March will be higher than what has been projected earlier by the RBI," Rangarajan said.

The former RBI governor also said the central bank would keep a watch on inflation, and some moderation can happen due to its actions, which, he said, is likely this month.

"We need to watch for behaviour of prices in December... possibly some action will be taken (by the RBI), which can have a moderating effect (on inflation)," he said.

Inflation for November jumped to 4.78 per cent from 1.34 per cent in October surprising all forecasters and creating apprehensions of an early withdrawal of soft monetary regime.

"By the end of December, they (RBI) can review the situation and take action...it (action) could come by end of December depending how the prices have behaved in December," he said.

PTI


First Published: Tuesday, December 15, 2009, 22:19


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