As wholesale price index (WPI) for November has eased to 7.48%, economists are hopeful that it will slow down further next year. However, concerns on rising commodity and crude price still remain.
In an interview to CNBC-TV18, Shubhada Rao, Chief Economist, Yes Bank said that headline numbers are reflecting more a base effect play as you go into the next quarter. Though she thinks that January-March quarter will start showing easing headline numbers, she cautions that the comfort level relatively remains limited because commodity prices are moving up and primary articles are not showing any signs of relaxing.
“As such the pressure are there, inflationary expectations we believe still remain elevated,” Rao explained.
According to experts, in its credit policy review on December 16 the Reserve Bank of India (RBI) will pause in raising rates. “RBI will certainly pause in December and the pause will carry over till January,” Abheek Baruah, Chief Economist, HDFC Bank said.
“Going forward, there are obviously inflation concerns particularly coming from commodities given the fact that there is huge amount of liquidity sloshing around in the system. So, we are calling for two-three hikes over fiscal 12 whether they will start from April or whether they will commence a little later depends on the way commodity prices pan out,” reiterated Baruah.
Source : Moneycontrol
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