The Prime Minister's economic panel on Sunday said inflation is likely to fall to 6.5 per cent by December from the "uncomfortably high" 8.6 per cent due steps taken by the Reserve Bank of India (RBI) and the expected fall in food prices on the back of good monsoons.
"Our own expectation is (that) by December the inflation rate would come to 6.5 per cent," said C. Rangarajan, chairman, Prime Minister's Economic Advisory Council (PMEAC).
The RBI may need to raise rates yet again in its quarterly policy on November 2 to tame high inflation, Rangarajan said.
The RBI has raised key policy rates five times so far this year. The rate of price rise in September was 8.62 per cent, up from 8.51 per cent in August.
"The inflation is at a uncomfortably high level. So continued actions on the part of RBI may be needed."
Prices of vegetables and fruits, which are contributing substantially to food inflation, are likely to fall in November and December as there is usually a seasonal decline in the prices of these commodities.
Food inflation rose marginally to 16.37 per cent for the week ended October 2, from 16.24 per cent in the previous week on the back of higher prices of fruits, select vegetables and milk.