Inflation expected to moderate by 2014-end: Economic Survey
09/07/2014 16:40
As the new government battles stubbornly high food inflation, the pre-budget Economic Survey today predicted that the headline inflation would ease by year end, providing room to the RBI to cut interest rates, reported PTI. “Headline WPI (wholesale price index) inflation is expected to moderate by the end of 2014. However, risks to the outlook stems from possible subnormal monsoon and higher crude oil prices (on account of the crisis in Iraq),” the Economic Survey 2013-14 tabled in Parliament by Finance Minister Arun Jaitley said. As inflation eases, it is expected that the RBI would adopt a more accommodative stance and bring down interest rate. “The monetary management challenge will also be helped by fiscal consolidation and addressing of supply side constraints that exacerbate food inflation. All these factors, in tandem, are expected to create room for monetary easing later this fiscal year,” it said. However, WPI inflation rose to a five-month high of 6.01 per cent in May from 5.20 per cent in the previous month mainly driven by higher prices of food items. The Survey said inflation showed signs of receding with average wholesale price index (WPI) inflation falling to a three-year low of 5.98 per cent during 2013-14 compared to 7 and 9 per cent over the previous two years.
09/07/2014 16:40
As the new government battles stubbornly high food inflation, the pre-budget Economic Survey today predicted that the headline inflation would ease by year end, providing room to the RBI to cut interest rates, reported PTI. “Headline WPI (wholesale price index) inflation is expected to moderate by the end of 2014. However, risks to the outlook stems from possible subnormal monsoon and higher crude oil prices (on account of the crisis in Iraq),” the Economic Survey 2013-14 tabled in Parliament by Finance Minister Arun Jaitley said. As inflation eases, it is expected that the RBI would adopt a more accommodative stance and bring down interest rate. “The monetary management challenge will also be helped by fiscal consolidation and addressing of supply side constraints that exacerbate food inflation. All these factors, in tandem, are expected to create room for monetary easing later this fiscal year,” it said. However, WPI inflation rose to a five-month high of 6.01 per cent in May from 5.20 per cent in the previous month mainly driven by higher prices of food items. The Survey said inflation showed signs of receding with average wholesale price index (WPI) inflation falling to a three-year low of 5.98 per cent during 2013-14 compared to 7 and 9 per cent over the previous two years.
