Industrial growth may go up to anywhere between 2.7 and 4 per cent in the last three months of this calendar year, up from 1.6 per cent in September. The wholesale price index (WPI) based inflation is expected to go up to around 4-5 per cent from 2.7 per cent in October, according to the Institute of Economic Growth (IEG).
The monthly monitor released by the institute says the inflation rate will increase to 4 per cent between November 2001 and January 2002. The consumer price index, however, is expected to decine slightly from its current growth rate of 4.7 per cent.
Following the recent credit policy, a moderate increase in money supply is expected along with a decline in the prime lending rates, the report adds.
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The Reserve Bank of India has brought down the bank rate and cash reserve ratio in the credit policy. On the trade front, the negative trend in export growth will continue in the next quarter, but import growth is expected to show a marginal recovery. This, together with the decline in the foreign institutional investor inflows, might reduce the foreign exchange reserves marginally and put pressure on the exchange rate.
The exchange rate is expected to stay between 48.1 and 48.4 in the next three months.