Rajya Sabha member and former Chairman of Prime Minister's Economic Panel C Rangarajan on Monday said he expects inflation to ease to 10 per cent by December.

"My own estimate is that probably by December, inflation rate may go down to 10 per cent," Rangarajan told reporters on the sidelines of a Ficci seminar on financial inclusion in .

He said inflation last year was moderate almost at the end of December, so base effect will be to heighten inflation in the current year.

The base effect relates to the affect on inflation because of its level in a year-ago period.

If inflation is low in a year-ago period, the comparative inflation in the current year will look higher.

HSBC India Country Head Naina Lal Kidwai said even though international crude oil prices are low and food prices are cooling off yet it is to be watched out how does inflation behave between now and March, which is a very critical year.

Inflation stood at 12.10 per cent for the week ended on August 30 despite moderation for three weeks in a row.

Inflation, the silent killer