Quote on IIP and CPI Numbers; Consumer headline inflation moderated to 5.7% in March 2023 Says Mr. Vivek Rathi, Knight Frank India
Below Quote on IIP and CPI Numbers By Mr. Vivek Rathi, Director Research, Knight Frank India
“Consumer headline inflation moderated to 5.7% in Mar’23 primarily supported by softening food prices, especially vegetables. Fuel inflation as well eased to 8.9%, however, with the recent surge of 15% in brent crude prices, following the crude oil production cut by the OPEC countries, the risks to increase in fuel prices remain on the upside.
However, the price pressure on non-food and fuel category continues to remain sticky. Price growth in categories such as clothing, household goods and services etc have continued to remain elevated. Thus, this dents the household’s disposable income reducing their spending capacity. Although, the wholesale prices have significantly declined, the producers are unlikely to pass this price reduction to the consumers, with an objective to maintain their profit margins. Thus, there are multiple factors pressurising consumer inflation which are more likely to sustain at least in the medium term.
Moderation in inflationary expectation was a key variable for the recently announced MPC decision that unanimously chose a pause in policy repo rate hike. We expect this moderation in inflation will further augment the proposition of benign interest rates and focus on economic growth, which together will also comfort the housing market consumers and developers.”
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