Inflation Is Likely To Peak At Around 13 Per Cent - June 30,2008

Inflation is likely to peak at around 13 per cent over the next two months before gradually moderating to around 8.5 to nine per cent by end-this fiscal, economists said.The country''s economic growth too would moderate below the earlier-forecasted eight per cent to around the 7.5-7.8 per cent level in FY 09, they said.

Global fuel prices present the most concern to policy-makers, the economists said. Inflation will be contingent upon oil prices, Crisil''s Director and Principal Economist, D K Joshi, said.Prices of products such as aviation turbine fuel and naphtha have shot up 40 per cent year-on-year, Enam Securities'' Chief Economist, Sachidanand Shukla, said.

While inflation would peak at around 12.5-13 per cent, Joshi expected the yearly average inflation rate to be around the 8.5 to nine per cent mark.This figure, again, is much higher than the 5.5 per cent projected by some economists earlier. Rao, however, pegged the average at a much higher nine to 9.5 per cent.Economic growth would be below the eight per cent mark, "maybe even below the 7.5 per cent mark", Bank of Baroda''s Chief Economist, Dr Rupa Rege Nitsure, said.But other economists such as Joshi and Enam''s Shukla felt that it would be in the 7.8 per cent range.