There will be no respite from rising prices in the immediate run, with PM's Economic Advisory Council (PMEAC) on Wednesday suggesting that inflation may touch 13 per cent while the GDP growth rate is expected to slide to 7.7 per cent from 9 per cent recorded last year.
"For some more time inflation can increase. It could touch 13 per cent...But by December it will start declining and is likely to moderate to 8-9 per cent by March 2009", said outgoing chairman of the PMEAC C Rangarajan while releasing the Economic Outlook for 2008-09.
Approving the Reserve Bank of India's tight monetary policy to contain inflation, which has touched the 13-year high mark of 12 per cent, Rangajaran said, "It (inflation) could be brought down to 8-9 per cent by March 2009 through co-ordinated policy action."
As regards RBI monetary policy, Rangarajan, who is also a former RBI Governor, said,
"The tight monetary stance needs to be maintained till the pace of inflation comes down."
Justifying the 7.7 per cent economic growth projection for 2008-09, Rangarajan said, "There is a slowdown in agriculture, industry and services and the global environment is not very conducive to growth. This will affect Indian economy as well."
The agriculture production is likely to grow at a lower pace of 2 per cent in the current year as against the 4.5 per cent in last fiscal, he said adding industrial output is expected to decelerate to 7.5 per cent from 8.5 per cent and services to 9.