Pushed by higher food prices, wholesale price inflation is rising at a faster pace than expected and could be more than seven per cent by the end of current fiscal, say experts.
If that happens, inflation would be much more than five per cent as projected by the Reserve Bank, which is facing the tough task of tackling inflationary pressures and promoting growth. The central bank's monetary policy review is slated for October 27.
Yes Bank Chief Economist Shubhada Rao said: "it (inflation) is moving at faster pace than anticipated. At this rate, there is a likelihood that it may rise above 7 per cent by March 2010."
Continuing its upward trend, wholesale price inflation inched closer to the one per cent mark at 0.83 per cent for the week ended September 19 mainly due to increase in food prices.
In the wholesale market, the annual rise in potato price was about by 81.18 per cent, while sugar jumped 44.47 per cent, according to government data.
Similarly, vegetables rates soared by 49.44 per cent and pulses by 20.05 per cent in the review period.
Rating agency Crisil's Principal Economist D K Joshi said inflation is moving upwards at a quicker rate and is likely to touch 7 per cent mark by the end of current fiscal.
However, Joshi said, RBI is likely to maintain a neutral stance in the October 27 policy as growth is a primary concern.