Inflation Likely To Ease From Mid-May, Says Economists

Economists fear the nation is in for a period of high
inflation despite the fact that it may start relieving from the current level
of 7.41% to about 6.4% from mid-May onwards.

Bank of Baroda Chief Economist Rupa Rege Nitsure said,
“There is a likelihood of inflation declining in about a month's time. But it
will still be around the 6.4 per cent mark.” 

The economists calculate inflation's twelve-monthly average
(FY 09) at about 5.5%, above the central Bank’s comfort level of 5% but
significantly lower than the existing level. 

Enam Securities Chief Economist Sachichidanand Shukla said,
“I see a cool down from May onwards. The Government's administrative measures
should help pull down inflation by around 0.40 per cent. A cash reserve ratio
(CRR) hike by the Reserve Bank would further help dampen inflation.”

"If supply-side constraints also show an improvement as
expected, inflation could reduce to around 6.25 per cent by mid-June," Mr.
Shukla added. 

Edible oils are already expressing signs of easing. Food
supplies should improve and with recession gripping various world-wide economies,
commodity prices also cool down, he said.

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