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Aug 16, 2017
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RBI may be right on inflation, economists temper their expectations
The Reserve Bank of India's conservative inflation forecast for the fiscal year which was criticised, may indeed be turning out to be true as economists now expect inflation to rise beyond the 4% target prescribed under the inflation targeting framework. Economists are tempering their expectations on the rate reduction possibilities during the year even as good monsoon is likely to cool prices and improved infrastructure helps improve productivity.The July inflation as measured by the Consumer Price Index at 2.4%, almost double the June levels of 1.4%, has surprised many. Even though food prices, especially tomato prices, did contribute to July inflation in some ways, a number of non-food factors like impact of the house rent allowances and initial impact of the Goods and Service Taxes (GST), have contributed to the July inflation numbers.
Source -
http://economictimes.indiatimes.com
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