Inflation may go up to 13% in two months: Experts

MUMBAI: Inflation is likely to peak to around 13 per cent over the next two months before gradually moderating to around 8.5 to 9 per cent by end of this fiscal, economists have said.

The country's economic growth too would moderate below earlier forecast of 8 per cent to around the 7.5-7.8 per cent level in FY 2009, they said.

"I expect inflation to peak to around 12.5-13 per cent in the next two months before beginning to decline. But double-digit inflation will continue at least for the next four to five months," Yes Bank's Chief Economist, Shubhada Rao said.

Global fuel prices present the most important concern to policy makers, the economists said. "Inflation will be contingent upon oil prices," Crisil's Director and Principal Economist D K Joshi said.

"Prices of products such as aviation turbine fuel and naphtha have shot up 40 per cent year-on-year," Enam Securities' Chief Economist Sachidanand Shukla said.

While inflation would peak at around 12.5-13 per cent, Joshi expected the yearly average inflation rate to be around the 8.5 to nine per cent mark.

This figure, again, is much higher than the 5.5 per cent projected by some economists earlier.

Rao, however, pegged the average at a much higher nine to 9.5 per cent.