Sunday, July 31 2005 10:57 Hrs (IST) - World Time -

New Delhi: Inflation rate in the country is likely to remain in the range of 4.21-4.26 in the next three months, economic think-tank NCAER said in a report.

"Our forecast for the coming months suggests that the inflation rate will lie between 4.21 and 4.26 per cent," National Council of Applied Economic Research said in its quarterly review of the economy.

The inflation rate from June onwards is on its way down and is likely to stay so for the coming three months too, inspite of the uncertainties on the oil front, NCAER said.

The think-tank said the Wholesale Price Index based inflation is likely to benefit by the base year effect.

Both industry and agriculture are expected to maintain robust growth and together with Meteorological Department's forecast of a normal south-west monsoon, inflation is anticipated to be under control.

Reserve Bank of India, in its Annual Policy statement has pegged inflation rate in the range of 5-5.55 per cent for 2005-06, which it did not alter during the quarterly monetary policy announced on July 26.

With crude oil prices moving up from $40 a barrel to $54, the Government has hiked petrol and diesel prices by Rs 2.5 per litre and two rupees per litre respectively on June 30.

The hike in petroleum products prices is expected to have both direct and indirect impact on the WPI as transport cost will be higher and costs will increase for the commodities that use petroleum product as an input.

However, the pricing power of manufacturers will also determine the course of its transmission into the economy, NCAER added.