PM Adviosry Panel Suggests Drop in Inflation Rate to 7%

PM Adviosry Panel Suggests Drop in Inflation Rate to 7% by March End

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The Prime Minister”s advisory panel said inflation could fall to 7% by fiscal-end, in the midst of projection that inflation could touch the double-digit mark.

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However, noting that food prices which have pushed inflation to 7.31% for December are expected to ease in the coming months stated PMEAC Chairman C Rangarajan.

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Whereas, the Reserve Bank of India (RBI) should take some money control measures to tame the rising prices.

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Meanwhile, his optimism is in contrast to alarming projections given by market analysts.

Citi said that if the uptrend seen in fuel and metals continues, inflation could enter the double-digit range in the coming months.

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HDFC Bank Economists stated that inflation is expected to touch 8.5% by March-end.

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Moreover, Rangarajan said the rise in inflation is mainly because of the increase in prices of food articles, which is largely due to supply shortfalls.

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Rangarajan expected the RBI to take back some special refinance facilities from the system while the RBI has projected inflation to be around 6.5% by this fiscal-end.

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The RBI had offered refinance facility to various sectors of the economy, faced with credit squeeze in the economy due to financial crisis that broke out in September 2008.

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🙂

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