The views of Rajeev Malik, senior economist at CLSA has expressed his views on inflation numbers and state of market.
Read above to get to know the likely prevalent trend in the market in coming months.Our own forecast is 7.5% for March, but the range is 7-7.5%, I wouldn’t really extract far too much in terms of policy implications. It’s also important to bear in mind and this is something local media in India does perhaps a bit too much about looking at the second decimal place for lot of these provisional numbers. I don’t think that is quite the way one should be looking at. I read today's inflation number at 9.7% in a way stabilising if you look at the core number as well which is what is expected. Don’t forget, nobody was expecting a dramatic fall. In fact even RBI’s guidance which I concur with was that October and November will remain high. It is only from December onwards that the improvement begins to come about. Then you see a more meaningful drop in the first calendar quarter. Having said that, one of the things that bound to happen is some adjustment as where fuel prices were concerned. The timing, magnitude, nature remains up in the air which in itself is one of the reasons why expectations haven’t really come off that dramatically. But I don’t think this particular number really threatens, the 7-7.5% range that we are likely to get at by March 2012.
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