Inflation to remain in double-digit this year: IEG

The Institute of Economic Growth (IEG) on Monday said inflation would remain in double digit this year, while suggesting the RBI to intervene in the forex market to moderate price rise. This is certainly a news that people does not want to see the existing double digit inflation rate.

If the double digit rate remains then the impact would be very high. Of late, the dollar is gaining strength against rupees, which could be another concern for the economy. Considering this aspect, the IEG also hints that RBI should also look into the forex market and currency values. Inflation rose to 11.89 per cent for the week ended June 28 signaling further tightening of the monetary policy by the apex bank. The institute forecast that the GDP growth would moderate to 7.5 per cent in the current fiscal from 9 per cent in 2007-08. However, a good monsoon is the need of the hour to have good production to check the supply side of the inflation.