Inflation May Decline To 7% In April

Inflation May Decline To 7% In AprilAccording to an adviser to the administration, headline inflation is likely to come down to near 7% as compared to 8.31% during February in the coming weeks.

C Rangarajan, chairman, the Prime Minister's Economic Advisory Council, anticipates the Wholesale Price Index (WPI) inflation to drop to about 7% by April end.

"I think the inflation numbers will show some decline for the month of March. But certainly by April-May we should be closer to 7%. I also think the food price inflation is coming down. The weekly data that are available indicate that the food price inflation is coming down," Mr. Rangarajan said.

"But since food price inflation is persistent for a long time it is also extended to the manufacturing side that is why the overall inflation is not coming down as fast we expected," he added.

He also said that the food price inflation must decline as the crop of wheat is said to be very good.

As the crop reaches the market, the food grain costs should start declining.

The central banking institution (RBI) in its third quarter monetary plan assessment had increased the projection for WPI inflation from 5.5% to7% by March 2010-11.

Rangarajan also thinks that the central bank will carry on with its monetary contraction.

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