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Inflation to ease soon: Finmin

Even as inflation sniffed at the double-digit mark hitting 9.89 per cent in February, the finance ministry today expressed the hope that it will moderate in the next few months.

business Updated: Mar 15, 2010 17:37 IST

Even as inflation sniffed at the double-digit mark hitting 9.89 per cent in February, the finance ministry on Monday expressed the hope that it will moderate in the next few months.

"I would expect another month of inflation roughly like this because the base effect is going to be very strong... after that inflation should begin to die down," chief economic advisor Kaushik Basu told reporters here today.

Basu was responding to the queries on inflation which rose to a 16-month high of 9.89 per cent in February, or the highest level since October 2008, driven mainly by high prices of food items, and petrol and diesel.

Terming inflation to be pretty much on the scripted path, Basu said by May-June inflation would come down because it was low in the corresponding period.

"The food index in January-February has virtually been constant...in fact fallen a little bit so the food price index is driven by base effect.

"I would expect another month of inflation roughly like this because the base effect is going to be very strong for one more month after that inflation should begin to die down," Basu said, adding he does not see another spike in the overall inflation in March.

Asked if the central bank would further tighten the monetary policy, he said RBI meets in April so there is still some time to see if the nature of inflation changes sufficiently for the right action.