Last month, the Reserve Bank of India forecast at its second quarterly review of the monetary policy that inflation rate in India would fall to 7 percent in March 2012. However, global financial services giant Citigroup has put the inflation a bit higher at 7.7 percent.

Citi: India's Inflation Prediction

Citi Investment Research and Analysis stated in its issue 'India Macro Report' that inflation will remain above 9 percent till December but would fall to around 7.8 per cent by March, 2012. Inflation stood at 9.73 percent in October.

"We expect inflation to remain over 9 per cent for the November-December reading. Post that, primarily due to the base effect, Wholesale Price Index (WPI) is expected to come off to sub-9 per cent levels during January-February and end the fiscal year with a reading of 7.8 per cent," predicts the Citigroup.

The Indian economic growth rate was 8.5 per cent in 2010-11 but it slipped to 7.7 percent in April-June period of the fiscal year. The RBI had earlier projected growth rate of the Indian economy for the year 2011-12 at 8 per cent but revised it to 7.6 per cent last month. But Citi forecast India's Gross Domestic Product growth to 7.6 percent.

Industrial production growth of the country has also dropped by 1.9 percent in September. Citi blamed the slow growth to RBI for raising repo rate 13 times March, 2010. It said that monetary policy of the RBI has caused slowdown in investments and industrial output.