‘To moderate in a few months'

Amid indications that inflation is all set to cross the double-digit mark, the government on Monday expressed the hope that it would ease in the next few months.

“I would expect another month of inflation roughly like this because the base effect is going to be strong. After that inflation should begin to die down,'' Chief Economic Advisor Kaushik Basu told reporters here.

Terming inflation to be pretty much on the scripted path, Mr. Basu said by May-June, inflation would come down because it was low in the corresponding period. “The food index in January-February has virtually been constant. I do not see another spike in the overall inflation in March,'' he added.

Asked if the central bank would further tighten the monetary policy, he said the RBI would meet in April so there was still some time to see if the nature of inflation changed sufficiently for the right action. “If the need arises they will have to deal with that. My expectation is that as the deficit is going to be folded up in the next few months that effect would also become dominant so the base effect will go,'' he said.

The deficit, being pulled back in a calibrated fashion, should also slow down inflation, he added.

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Printable version | Feb 18, 2020 8:40:13 AM |

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