A day before the announcement of the inflation data for August, the Planning Commission said that the figures would remain high but would start declining in subsequent months to reach a level of 6 per cent by December-end.
"The WPI data for August will be high as usual due to base effect. The effect of the monsoon was felt in the last week of August," Planning Commission Deputy Chairman Montek Singh Ahluwalia said.
The government is slated to announce the inflation data for August on Monday. The inflation, based on movement in wholesale prices was 9.97 per cent in July. It had been in double digits for five months till June.
Food inflation has also been in double digits for most of the year, barring a fortnight in July, and clocked 11.47 per cent for the week ended August 28. Ahluwalia, however, said that overall inflation is likely to dip from September and fall to around six per cent by December.
"You will see the downward trend in WPI inflation in the September data which will come out in the middle of October. And I know that by December the WPI would be close to 6 per cent," he said.
Ahluwalia also said there is no need to revise the GDP growth target of 8.5 per cent for this fiscal, despite the surprisingly good growth in industrial production during July.
"There is no need to revise 8.5 per cent growth target (for GDP)," Ahluwalia said. His latest statement is contradictory to what he said last week after the factory output growth in July showed a increase of 13.8 per cent, much higher than forecasted by experts.
"These July figures, I would say, are better than what I had expected. On the whole, taking together April-July, it thus suggests we are on track at least to achieve the growth rate target...In fact, there may be a good case to marginally increase it (GDP target)," he had said.
The country's GDP grew by 7.4 per cent last fiscal. In 2008-09, the economic growth had been 6.7 per cent, while it had clocked an annual growth of over nine per cent between 2005-06 and 2007-08.
