New Delhi: The Prime Minister’s economic advisory panel on Friday expressed hopes for inflation to decline to 6.5 per cent 9 per cent at present, by the fiscal end. However, an increase in fuel prices is likely, it said.

"If the monsoon is normal, then the food inflation will come down. However, the fuel prices could go up. Allowing for some increase in fuel prices, inflation could come down to 6.5
per cent by the end of this fiscal," Prime Minister's Economic Advisory Council (PMEAC) Chairman C Rangarajan said.

Rangarajan also expects headline inflation in April 2011 to decline from 8.98 per cent in the previous month.

"The April inflation will be somewhat lower than March inflation. But inflation will remain at an elevated level in the next few months," Rangarajan said.

He also pitched for a "substantial" jump in prices of petroleum products in line with the rising crude prices in the international market.

Persistently high inflation has started affecting the country's economic growth, with the RBI projecting a GDP growth rate of around 8 per cent in the current fiscal as against the
government's earlier estimate of 9 per cent.

Due to a drop in the price of pulses and vegetables, especially potato, food inflation fell to 7.7 per cent for the week ended April 30, the lowest level in the last 18 months.

The Central Bank has been trying to tame high prices by raising its lending (repo) and borrowing (reverse repo) rates.