Inflation will average 9% in FY11, compared to 3.6% in the preceding fiscal, a leading economic think-tank has said.
"Unseasonal rainfall in October and November, 2010, damaged production of some crops, including onions... In addition, exports of cotton and sugar have been permitted... Incorporating all these factors, we estimate that inflation will average 9% in 2010-11, as compared to 3.6% in the preceding fiscal," the Centre for Monitoring Indian Economy (CMIE) said in its latest review of the country's economy.
Between April and December, 2010, inflation was 9.4%, compared to 1.7% in the corresponding period of 2009.
"Major contributors include fruits, milk, eggs-meat-fish, condiments-spices, raw cotton, fuel and power, textiles and basic metals, alloys and metal products," the CMIE said.
The think-tank foresees inflation coming down to 8.1% in the fourth quarter of the current fiscal from 10.6% in the first quarter and 9.3% in the second quarter.
In the third quarter ending December, 2010, it was 8.3%.
"Looking at developments at the sectoral level in the remaining period of 2010-11, we expect that the year-on-year changes in WPI of food articles will be higher at 16.8% on account of higher inflation in milk, vegetables, fruits and eggs-meat-fish," it said.
Likewise, inflation in the fuel group is expected to drop from 14 per cent in the first-quarter of 2010-11 to 10% in the last quarter. In manufactured goods it is expected to drop from 6 per cent to 3.5%, it said.
Among manufactured goods, inflation in food products, beverages, textiles, wood and wood products, chemicals and chemical products and basic metals will be lower in the last quarter of FY11 than in the quarter ended June, 2010, CMIE said.