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Headline inflation to average 8.6% in 2011-12: Nomura

In its 'Asia Economic Alert', global banking giant Nomura also said the Reserve Bank of India is likely to hike short-term lending (repo) rate by 100 basis points in 2011-12.

twitter-logo PTI   New Delhi     Last Updated: April 26, 2011  | 17:39 IST

India's headline inflation is likely to remain high this year too, registering an average of 8.6 per cent in 2011-12, as manufacturers are likely to pass on input costs to consumers, global banking giant Nomura said on Tuesday.

In its 'Asia Economic Alert', the banking and asset management behemoth also said the Reserve Bank of India is likely to hike short-term lending (repo) rate by 100 basis points in 2011 with the purpose of curbing inflationary pressure.

"We expect Wholesale Price Index (WPI) inflation to average 8.6 per cent year-on-year in 2011-12 from 9.4 per cent in 2010-11," it said.

The high projection is on account of the fact that costs have not yet been fully passed on to the consumers.

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