Inflation may come down to 8-9 per cent by March 09

NEW DELHI: Inflation is expected to cool down to 8-9 per cent by March 2009 if the global crude oil prices do not go up from the current level, PM's Economic Advisory Council, Chairman C Rangarajan said on Saturday.

"As things stand, perhaps to look at an inflation rate of 8-9 per cent will be a difficult thing, but probably, we will do it by March 2009," Rangarajan said at the launch of a book ceremony.

The international crude prices have come down to around $123 a barrel after crossing $147 a barrel on July 11.

Rangarajan, who had earlier said inflation rate could cool to 5-6 per cent by October, said the oil prices and consequently commodity prices have gone beyond all expectations.

For the week ended July 19 inflation touched 11.98 per cent mark.

"You can get a much lower rate(of inflation), if there is confluence of favourable factors such as moderation in oil prices and so on. Otherwise if the oil prices remain at the prevailing rate that is best estimate ( for inflation)," he said.

On GDP growth prospects, he said the economy is likely to slow down due to various external and domestic factors and may not be able to touch the previous rate of 9 per cent.

"As far as growth is concerned, it will slow down. It will slow down than what we have experienced in previous years. But nevertheless, I think we can still hope to have GDP growth of economy between 7.5 to 8 per cent," he said.

The EAC is expected to submit its report on Outlook of Economy for 2008-09 next week. In January, the EAC had projected GDP growth of 8.5 per cent for 2008-09.