Tackling the greedy dragon of inflation has not been an easy job for the government. July inflation number may be a respite as it has eased slightly to an eight-month low. It has come in at 9.22% compared to 9.44% on a month-on-month basis as the rate of price rise in food articles and petro-products eased, though pressure remained on manufactured items.
However, Rajeev Malik, senior economist at CLSA feels that inflation is still elevated in India. Hence, according to him, the Reserve Bank of India (RBI) is likely to hike rates by 25 basis points on September 16. In an interview to CNBC-TV18, he said, "The government is still not fully acknowledging slowdown risk."
Malik is seeing inflation numbers below 10% range in the next few months.
Going forward, he is worried that the GDP growth could slow down to 7%. Here is the edited transcript of the interview. Also watch the accompanying videos. Q: What did you make of the inflation numbers yesterday as there is a possibility of a rate hike?
A: I would concur with that. Even though the IIP details were weak, people have focused on the headline industrial production number. For example, a distant view of a model looks very pleasing, but a close investigation will help us leave a conclusion that it's a bad Botox job.
Apart from the capital goods segment, the details were quite weak. While yesterday
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