"Inflation should begin to moderate in the next 2-3-months following fiscal and supply-side measures taken by the government and the RBI's own monetary measures," Reddy said in his customary post-credit policy news conference.
Though forecasting a slowdown in economic growth to 8-8.5 per cent this fiscal, Reddy said that the expected good monsoon coupled with a strong performance from the services sector will propel growth.
"The only pressure point in the economy now is inflation. We are, therefore, giving highest priority to inflation," he said.
The Monetary and Credit Policy 2007-2008