Highlights:
CPI:
- CPI inflation rose to 3-month high of 5.6% in November.
- The uptick was on account of sharp increase in vegetables prices.
- Core inflation moderated to 4.2% from 4.4% a month ago.
- Vegetables prices could soften in coming months due to improved seasonal supply.
- Sticky inflation in non-perishable food categories pose a risk of potential generalisation of price pressures.
- An unfavourable base is expected to push CPI inflation higher to around 5.8-6% in December.
- For FY24, our CPI inflation expectation is unchanged at 5.4%.
IIP:
- IIP growth jumped to a 16-month high of 11.7% due to favourable base.
- Manufacturing grew by 10.4% due to base-effect and marginal improvement in momentum.
- Base-effect masked weakness in consumer goods segment.
- Going ahead, a durable consumption recovery remains critical for industrial activity.
