Highlights
CPI:
- In February, headline inflation held steady at 5.1%, marking the sixth consecutive month within the RBI’s target band.
- While there was a broad-based moderation in prices across all major categories (excluding food) , the inflation was kept elevated by higher food prices.
- Core inflation remained subdued and moderated even further, consistently staying below the 4% threshold for three consecutive months.
- Continued double digit trends in vegetable (30.3%), spices (13.5%) and pulses (18.9%) remain a source of concern.
- Looking ahead, a favourable base effect is expected to persist until July 2024, helping absorb potential upward risks to price pressures to a certain extent.
- For FY24, we expect inflation to average 5.4%, with Q4FY24 at 5.1%. We expect inflation to average 4.8% in FY25.
IIP:
- IIP growth eased to 3.8% in January, following an upwardly revised 4.2% in December.
- Manufacturing growth moderated to 3.2% (Vs 4.5% in December).
- Consumer durables output rose sharply (by 10.9%) on a favourable base; non-durables output declined.
- Going ahead, a durable and broad-based improvement in consumption remains crucial for industrial activity.
