New Delhi: The Reserve Bank of India's decision to raise the cash-reserve ratio by 50 basis points and repo rate by 25 basis points late last week would control inflation in the days to come but will affect economic growth according to leading economists.

It is worth noting that a day after the rate hike by the RBI, Finance Minister P Chidambaram had told Indian Institute of Management graduates that the country's economy was growing at a rate below its potential.

Led by an unprecedented boom in domestic consumption, the country achieved an average GDP growth of 8.6 per cent over the past three years. For 2006-07, growth is forecast at 9.2 per cent, the fastest in 18 years.

With the growth the wholesale price index has also been rising sharply and inflation which was averaging 5.4 per cent in 2006-0 has been hovering at the 6.5 per cent level since January this year.

The government as well as the RBI has taken a series of steps in the last few months to contain inflation which is seen worldwide as a tax on the poor.

Crisil Prinicipal Economist DK Joshi said if the latest steps taken by the RBI to suck out some liquidity from the market failed to bring inflation below 6 per cent, the central bank could hike interest rates further.