SBI staff expects CPI inflation to come down to 5 per cent by March this year.
India’s CPI and core CPI stay in equilibrium long-run bond, with the CPI adjusting towards the core CPI, an SBI newsletter said.
The softening is seen in many sub-groups, including clothing and footwear.
CPI inflation is likely to dip to 5 per cent by March.
The index of industrial production fell to 2.4 per cent YoY in November from October’s 11.6 per cent.
CPI inflation in the country rose to a four-month high of 5.69 per cent (slightly lower than SBI expectations of 5.98 per cent) due to increase in food price inflation. Inflation in all the other components increased at a lower rate when compared to November. The pick-up in inflation was driven by an unfavourable base effect of around 10 basis points (bps).
The impact of disruption around Red Sea remains the main risk to inflation in general.
Meanwhile, the index of industrial production (IIP) growth data showed a deceleration to 2.4 per cent year on year (YoY) in November last year from 11.6 per cent in October. The manufacturing sector registered lower growth.
Fibre2Fashion News Desk (DS)
