Inflation to stay around 8% till Mar 2012: Citi

Global banking and research giant CitiGroup has projected India's headline inflation to remain elevated during this fiscal, and stand at 8% by March 2012, on account of high commodity prices and upward revision of past data among other factors.

The 8% projection for March 2012 is higher than the 6-7% forecast by the Government. The Reserve Bank had also earlier said it expected headline inflation to moderate to around 6% by end of the fiscal.

"We... Expect headline inflation to average 9-9.5% (in 2011-12) with the March reading likely at 8% as against the RBI's estimate of 6%," Citi India said in its 'India Macro Flash'.

It further added: "We maintain our view that prices will remain elevated due to upward revision in minimum support prices of agri crops which sets a floor to market prices, continued upward revisions to past data and the fact that while commodity prices have eased, they are relatively higher than last year".

Headline inflation, as measured by Wholesale Price Index (WPI), stood at 9.44% in June, up from 9.06% in May.

In recent months, the inflation data has seen frequent revisions including for April which was revised to 9.74% from the initial estimate of 8.66%. The revisions have put further pressure as the revised numbers soar much above the initial estimates.