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Published on 13/10/2022 9:44:16 AM | Source: Knight Frank

Perspective on IIP and CPI: At 7.41% consumer inflation in the economy continues to remain defiant due to increasing food prices Says Mr. Vivek Rathi, Knight Frank India

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Below Perspective on IIP and CPI 13 October 2022 By Mr. Vivek Rathi, Director-Research, Knight Frank India

"At 7.41%, consumer inflation in the economy continues to remain defiant due to increasing food prices. The future trajectory of inflation is on the upside, pressurized by import inflation arising from sharp rupee depreciation. Price pressure on import of crude oil shall have a cascading impact on other items of the basket too. Additionally factors such as transmission of input costs and pick-up in consumer demand supported by service sector recovery would further add to inflationary risk in the coming months. With the inflation level consistently remaining ahead of the 4% CPI target level of the RBI, an out of turn monetary policy rate action remains a possibility.

The degrowth in industrial production in August was primarily due to high base and softening in consumer durable and non-durable segments. However, except for a few deterrents due to seasonal factors, the industrial production in the economy would continue to expand in the coming months supported by revival in consumer demand, government’s capex push, and improved capacity utilization. Robust credit growth and strong domestic demand at the current juncture holds promise for better numbers in near future.”

 

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