Clear and present danger

As we progress into 2011-12, inflation woes continue to weigh down on the economy. Inflation, which remained high at 9.4% in the first quarter of 2011-12, is expected to surge to double digits in the second quarter. RBI’s year-end target of 6% (which is still above their comfort zone) appears tough to achieve despite 10 rate hikes and an emerging consensus that growth is set to moderate. CRISIL expects GDP growth to slow to 7.7-8.0% in 2011-12 from 8.5% in the previous year. 

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