Mumbai: Inflation may touch the 6% mark by the end of this fiscal due to surging food prices and decline in agricultural output, research firm Dun & Bradstreet said.
“Given the high prices of primary food articles and waning base effect and an expected decline in agriculture production, the Wholesale Price Index inflation might surge to around 6% by end of the current fiscal,” Dun & Bradstreet India chief operating officer Kaushal Sampat said.
Kaushal said inflation in primary food articles stood at 13.3%, a figure last seen in December 1998.
Inflation stood at 0.70% for the week ended 26 September. However, the rate of price rise fell from 0.83% in the previous week on slight easing of food prices over the week.
The drought-hit kharif crop, which accounts for over 50% of total agriculture output, will impact rural consumption and industrial sector subsequently, Sampat said.
“Lower agriculture growth might have a negative impact on the rural consumption demand and subsequently on the industrial sector. Expected lower agriculture production might also put downward pressure on agriculture exports, which accounts for around 11.3% of total exports,” he said.