The rising inflation, which has touched a 13-year high of 12.83 per cent, is likely to come down to 5-6 per cent over a period of 12 months, Chief Economic Advisor Arvind Virmani said on Wednesday.
He further said that the Indian economy is likely to see moderation in growth at 7.75-8.75 per cent this fiscal from an impressive 9 per cent in 2007-08 due to a fall in industrial growth and volatility in oil prices.
In a presentation to economic advisers attached to various ministries, Virmani said inflation could come down to 5-6 per cent in a year but it would depend on oil prices.
Virmani is marginally scaling down his earlier projection of 8-9 per cent economic growth made in March.
Earlier this month, the Prime Minister's Economic Advisory Council had also revised downwards its forecast for economic growth rate to 7.7 per cent. But Finance Minister P Chidambaram recently said that he expected the economy to grow at close to 8 per cent.
Virmani said the economy can achieve an average growth rate of 9 per cent during the 11th Five Year Plan.
The figures for first quarter of current fiscal year will be released on Friday.
The economy grew by 9 per cent in the first year of the Five Year Plan, that is 2007-08. The 11th Five Year Plan has targeted the economy to grow at 9 per cent with terminal year clocking a 10 per cent growth rate.
Virmani said he is revising his estimates due to a fall in industrial growth and fluctuation in crude oil prices.
Industrial production grew at 5.2 per cent in the first quarter of this fiscal against 10.3 per cent a year ago.
Various analysts predict the Indian economy to moderate to sub-eight per cent due to monetary tightening.
After a meeting with the Finance Minister on Tuesday, CII President K V Kamath also said that rising interest rates could hamper new investments.