PMEAC to review economy in mid-Feb; may up inflation forecast

PMEAC to review economy in mid-Feb; may up inflation forecast

New Delhi: The Prime Minister’s Economic Advisory Council (PMEAC) is likely to revise upward inflation forecast for the end of this fiscal to 7% when it reviews the country’s macro economic situation in mid-February.

“The PMEAC would review the macro economic situation in Mid-February and is likely to revise upwards its fiscal-end inflation forecast from 6.5% to about 7%," an official told PTI.

While releasing the economic outlook for the current fiscal in July last year, the PMEAC had estimated inflation will come down to 6.5% by the end of 2010-11.

However, PMEAC chairman C Rangarajan later said that inflation was likely to come down to 5.5% by fiscal-end, which was subsequently revised to 6% and 6.5%, respectively.

More recently, he put the March-end inflation estimate at 7% on “higher-than-expected" wholesale price rise.

“March-end we had originally thought, it would be around 6.5%, but given the current trend, it could be anywhere between 6.5% and 7%," Rangarajan had said.

Besides, in its quarterly monetary policy on 24 January, the RBI has also raised its fiscal-end inflation forecast to 7% from the earlier estimate of 5.5%.

The overall inflation for December, measured on the basis of wholesale prices, increased to 8.43% in December, from 7.48% in November. The rise in inflation is mainly due to increase in food prices.

Snapping the downward trend of two consecutive weeks food inflation inched up marginally to 15.57% for the period ended 15 January on account of escalating vegetable prices particularly onions.

Food inflation for the week ended 8 January was recorded at 15.52%.