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Headline inflation will come down under the 6% mark in July itself but will stay at an elevated level of over 5% for some time, Chief Economic Advisor K V Subramanian said on Thursday.
Such an outcome will get the price rise back into the upper-end of the target band given to RBI, he said, adding that consumer price inflation had breached the mark for three consecutive quarters last fiscal because of supply side issues like challenges in movement of goods.
“With reasonable probability, I expect this month the (inflation) print to come less than 6 per cent,” Subramanian said during a conference organised by industry lobby Ficci.
The CEA said in FY21, inflation was impacted because of the first wave of the pandemic which lasted longer, while the second wave saw distributed lockdowns and did not have a deep impact on inflation.
The RBI has been holding rates to aid growth despite the surge in inflation. However, after the recent data prints, concerns have been expressed over the price rise. The next monetary policy meeting of the central bank will be held during August 4 – 6.
On the growth front, Subramanian said the FY22 number should be within the ballpark of 10.5% as estimated by the finance ministry earlier. It can be noted that the RBI had revised down its estimate to 9.5% given the reverses of the second wave.