Inflation may drop, but rise in commodity prices a worry: CEA

Chief economic advisor Kaushik Basu on Tuesday said that inflation may gradually drop from the current level of 9.9 per cent, but it was too early to drop guard.

“I believe, it is a bit of a risky remark, that we have peaked in terms of inflation. March was probably the worst month in terms of inflation. There should be a slowing down...a slow slowing down from now onwards,” Mr. Basu said at a forum organised by media house Jagran group.

However, he cautioned that rising global prices of iron, steel and oil may put pressure on inflation and the situation should be addressed.

“There are international commodity prices which are rising — iron, steel and oil — which are sort of basic goods.

So, there is some risk that these are going to feed into inflation, we have to be prepared to deal with it,” Mr. Basu said.

RBI has projected inflation to come down to 5.5 per cent by end of this fiscal from 9.9 per cent in March, but also warned that volatile global commodity prices along with uncertain monsoon and demand pressures may jack it up.

Mr. Basu, however, did not elaborate what steps should be taken to address the issue of inflationary pressures from global commodity prices.

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Printable version | Apr 9, 2020 8:46:32 PM |

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