Are households really anticipating such a high level of inflation for fiscal 2014 – well above the 2 percent level? That would mean that households’ “short-term” inflation expectations covering the period of fiscal 2014 should be approaching at least around 3 percent (based on the Bank’s view); however, such expectations may remain at around 2 percent or less.
Agriculture, the massive public infrastructure projects, and revitalization of industry and services sectors will lead this recovery. We expect Inflation to remain benign, thus providing an enabling environment for jumpstarting economic activities. We expect inflation to settle within the range of 1.75 to 2.75 percent this year, and 2.0 to 4.0 percent next year and in 2022. Trade will also recover.