Dec 2010 inflation may be over 8%: ICRA
"The overall WPI inflation for December 2010 is likely to be in excess of 8%, which may prompt the RBI to undertake further monetary tightening through increases in the key policy rates," according to Aditi Nayar, Economist, ICRA.
January 06, 2011 / 16:20 IST
India's food inflation accelerated for the fifth straight week to the highest in more than a year, reinforcing fears it will spill over to broader prices and pile pressure on the central bank to tighten monetary policy.
Unseasonal rains have pushed up prices of vegetables such as onions and tomatoes in recent weeks, and the authorities are bracing to live with elevated price levels in the near term.Commenting on the same Aditi Nayar, Economist, ICRA, said, "The sharp rise in vegetable prices contributed to food inflation climbing above 18% for the week ending December 25, nearly twice as high as the average food inflation in November 2010."Prices of vegetables tend to display considerable volatility on a weekly basis, reflecting mismatches in demand and supply, particularly as these items are perishable, she said, adding that although vegetable prices are likely to ease substantially in the coming weeks, food inflation may remain in double digits in January, with prices of protein sources such as milk, poultry, meat and fish likely to remain firm."The overall WPI inflation for December 2010 is likely to be in excess of 8%, which may prompt the RBI to undertake further monetary tightening through increases in the key policy rates," according to her. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
