Published on 13/02/2020 10:38:55 AM | Source: Motilal Oswal Financial Services Ltd

Views On CPI Inflation Numbers By Mr. Nikhil Gupta

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Below is the Views Quote CPI Inflation numbers By Mr. Nikhil Gupta, Chief Economist at Motilal Oswal Financial Services.

Inflation worries extends; and growth concerns widen

* In contrast to market consensus of 7.4% and our exp of 6.9%, Jan'20 headline inflation moved higher to 7.6% from 7.4% earlier. Seperately, IIP declined unexpectedly 0.3% YoY, as against the market consensus (and our exp) of 1.5% growth.

* CPI details are more worrisome. Core CPI rose to 4.2% and CPI ex vegetables rose to 40-month high of 5%. While veg & fruits inflation was on expected lines, other items grew faster.

*In IIP, *capital goods production declined for 12th consecutive month and consumer goods production fell fifth time in last seven months. Primary goods, construction and intermediate goods IIP, however, post better than expected growth.

* Overall, the concerning combination of weaker growth and higher inflation remains in Dec'19. *Rate cuts are things of the past and 3QFY20 GDP growth will be definitely lower than in 2QFY20.


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