Economy

Inflation in Aug to be close to double-digit: Kaushik Basu

PTI New Delhi | Updated on August 16, 2011 Published on August 16, 2011

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Inflation in August may touch the double digit mark, Chief Economic Advisor Kaushik Basu said on Tuesday, adding that any reprieve from high prices was unlikely in coming months.

“By our calculation, there are still a couple of more months of relatively same level of inflation (as in July).

In fact, inflation could climb a little bit next month... it could be going to close to 10 per cent inflation for the month of August,” Mr Basu told reporters here.

His comments came after the headline inflation for July declined to an eight-month low of 9.22 per cent as the rate of price rise in food articles and petro-products eased, though pressure remained on manufactured items.

Mr Basu said that inflation would remain at an elevated level till December before showing any signs of moderation.

“By our calculation there are still a couple of more months of relatively same level of inflation. It will be roughly where we are, we are expecting, till December. After that we do expect some sharp decline in inflation“, he said.

When asked if the RBI is likely to further raise its key policy rates considering the IIP numbers, Mr Basu said: “The IIP numbers were better than what we had expected... But RBI will have to take a call. “We are expecting that we will get together and do an analysis of where we stand... otherwise the news is not good.

On a couple of sectors we have done well,” Mr Basu said.

He cited good performance of exports and pick up in Foreign Direct Investments as positive factors.

Published on August 16, 2011
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