A fall in vegetable prices is likely to ease headline inflation and retail inflation to 6.5 per cent and 9.20 per cent respectively in December, Prime Minister's Economic Advisory Council (PMEAC) Chairman C Rangarajan said on Sunday.
"Some of the things that have really pushed up inflation are vegetables like onion prices, which have crashed in December. Therefore when December number comes in mid January, we will see retail inflation coming down by 2-2.5 percentage from the current level of 11 per cent or so. There could be a decline in wholesale price index ... could be the order of 1 percentage," Rangarajan told reporters on the sidelines of the silver jubilee celebration of Indira Gandhi Institute of Development Research.
Wholesale price-based inflation (WPI) accelerated to 14-month high of 7.52 per cent in November, while retail inflation quickened to eight-month high of 11.24 per cent during the month.
Going forward, Rangarajan said, the declining trend in inflation will continue and WPI may ease to 6.5 per cent by March-end.
"The RBI has estimated WPI to be around 6.5 per cent by March end. That is the number we are looking at. We will see a decline in December and perhaps it will continue," he said.