WPI-based inflation may hit 6% by end-March

New Delhi, Sept. 18

The wholesale price-based inflation could hit 6 per cent by March 2010, the Reserve Bank of India Deputy Governor, Dr K.C. Chakrabarty, said here on Friday.

This was higher than the central bank’s July 2009 forecast of 5 per cent.

“The rise in WPI inflation has not come as a surprise to us. We have always said that by March it will be 5 per cent. It may become 6 per cent,” Dr Chakrabarty told reporters on the sidelines of a seminar on financial inclusion.

He admitted that inflationary pressure was already there and that the consumer price inflation of 12 per cent was an area of concern.

Official data released on Thursday showed that WPI-based inflation had turned positive after remaining in the negative territory for a little over three months.

A surge in food prices had pushed WPI inflation for the week ended September 5 to 0.12 per cent as against (-) 0.12 per cent for the earlier week.

Dr Chakrabarty noted that high procurement prices were contributing to food inflation. He also felt that time was not ripe to unwind the accommodative monetary policy stance. Link...