Highlights:
CPI:
- The CPI inflation moderated sharply to 3.5% in July from 5.1% in June, largely on account of a favourable base of last year.
- Core inflation remained largely benign, rising to 3.4% in July, up from 3.1% in June.
- Food and Beverages inflation moderated to 5.1% in July. However, risks to food inflation remain elevated.
- It will be crucial to monitor the distribution of rainfall and Kharif sowing. Despite a pick-up in monsoon, key agrarian regions continue to face significant deficit in rainfall.
- For FY25, we expect inflation to average 4.8%.
IIP:
- IIP growth moderated to 4.2% in June from 6.2% in the previous month.
- Growth in manufacturing and electricity output moderated to 2.6% (Vs 5%) and 8.6% (Vs 13.7%), respectively.
- Mining output accelerated to 10.3% (Vs 6.6%).
- Low base aided growth in consumer durables output whereas non-durables output contracted.
- Broad-based consumption improvement and the revival of private capex remain crucial for IIP going forward.
