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MUMBAI: Inflation based on the wholesale price index (WPI) is expected to jump to 12.63% for the week ended August 9, according to a UTVi poll of 10 economists. The rate stood at 12.44% during the week ended August 2. A contraction in the base effect last year along with a pick up in prices of sugar, cement, machine tools, vegetables, and fruits are seen as the reason for the higher median estimate for the inflation number. Economists said even a small fall in the base effect was expected to have a higher impact on the inflation rate. For the week ended August 9, the index for all commodities is seen at 240.7, up three basis points from 240.4 in the previous week. Rising inflation has been a bugbear for the government and Reserve Bank of India, which has tightened interest rates since April to combat inflation. On Tuesday, C. Rangarajan, former chairman of Prime Minister's Economic Advisory Council, told UTVi that inflation has to fall substantially for RBI to be comfortable. In July, RBI raised its FY09 inflation target to 7% from 5.5% announced in the April policy. Rangarajan said the tight monetary stance of RBI is expected to remain for some time, but if oil prices continue to fall, RBI may not resort to another round of rate hikes. UTVI POLL RESPONDENT (%) DSP MERILL LYNCH 12.59
LEHMAN BROTHERS 12.59
STANCHART 12.59
AXIS BANK 12.63
IDBI GILTS 12.63
YES BANK 12.63
KOTAK BANK 12.63
ICICI BANK 12.63
ICICI SECURITIES 12.64
BANK OF BARODA 12.68 MEDIAN 12.63
HIGHEST 12.68
LOWEST 12.59 |
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