Below are Perspective on IIP & CPI numbers by Ms. Rajani Sinha, Chief Economist & National Director – Research, Knight Frank India
“The contraction in IIP for November is not surprising as the other high frequency economic indicators were also showing a moderation in growth. A lot of economic revival seen in the previous few months had been because of pent-up demand and festive demand, hence the growth momentum was expected to moderate. With daily COVID infection rate reducing, vaccine round the corner and the economy close to normalcy, the critical aspect will be at what level the growth momentum stabilizes”.
“The moderation in CPI inflation has been mainly because of sharp fall in food inflation, which has been possible due to fall in vegetable prices, even while protein inflation has remained high. The critical aspect is that other components of inflation, including core inflation has remained sticky at around 5.2%. While the fall in overall inflation at this juncture is a welcome relief, RBI will be closely watching core inflation as demand revives in the economy”.
Above views are of the author and not of the website kindly read disclaimer