Inflation is projected to remain in double digits till the end of this year as the fiscal measures initiated by the government are expected to yield results only by December, a latest report by Dun & Bradstreet says.

"Given the supply-driven nature of the current inflation, the RBI's measures are likely to have limited impact towards controlling inflation in the short run," leading business information provider Dun & Bradstreet India COO Kaushal Sampat said.

The fiscal measures initiated by the government to augment supply are expected to begin yielding results from December. As such, we expect inflation to continue to remain elevated and in double digits till December 2008," Sampat added.

High input costs and rising interest rates have impacted industrial growth, with IIP growth slowing down to 5.23 per cent in first quarter of FY'09, against a growth of 10.28 per cent in the same period last year, the report stated.

However, with inflation continuing to be in double digits and the money supply growing well above target, RBI further tightened its monetary stance, increasing the CRR and repo rates.

"Recent increase in policy rates could lead to upward movement in banks' lending rates, thereby increasing pressure on corporate margins. Also, high interest rates would further dampen the demand in interest sensitive sectors. We may witness deferment in investment decisions by companies," Sampat said.

Industrial growth is, therefore, expected to be subdued in the months to come and average at around 6.8 per cent during FY'09, he added.

Besides, Prime Minister's Economic Advisory Council's Chairman C Rangarajan had said on Wednesday that, "For some more time, inflation can increase. It could touch 13 per cent... But by December it will start declining."

PMEAC lowered the GDP growth projection to 7.7 per cent during 2008-09 from 8.5 per cent forecast in January. The council, however, hoped that inflation "could be brought down to 8-9 per cent by March 2009 through coordinated policy action."

Standard and Poor's Asia-Pacific Chief Economist Subir Gokarn had said that the global rating agency expects the inflation to remain in double digit till February, 2009, which could propel another rate hike from the Reserve Bank of India in October.

On July 29, the RBI had raised banks' Cash Reserve Ratio, the mandatory deposits banks keep with the apex bank, by 0.25 per cent and short term lending rate to banks or repo rate by 0.50 per cent.

The RBI hiked CRR for the fourth time this fiscal and repo rate the third time and had said these steps would suck out about Rs 8,000 crore from the banking system to moderate credit growth.

Inflation surged to 12.44 per cent for the week ended August 2, driven by higher fruit and fuel prices.

In June, the country's wholesale price index (WPI) had entered the double digit figure, when it touched a 13-year high of 11.05 per cent after a partial pass through of increase in global crude prices.