Perspective on CPI data By Mr. Nikhil Gupta, Motilal Oswal Financial Services
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Below is Perspective on CPI data By Mr. Nikhil Gupta, Chief Economist at Motilal Oswal Financial Services
Feb'22 headline CPI at 6.1% YoY, in line with market consensus but higher than our expectations
FY23 inflation could average ~5.5%
Headline CPI came in at 8-month high of 6.1% YoY in Feb'22, in line with market consensus (6%) but higher than our forecast (5.8%).
Within food items, some items (cereals, vegetables etc) saw higher inflation, while others (pulses, oil & fats etc) saw slower inflation. However, food inflation at 15-month high of 5.8% was higher than our forecast of 5.2%.
Excluding vegetables, inflation was unchanged at 10-month high of 6.1% last month.
Core inflation was unchanged at 6.2% YoY for the fifth consecutive month.
Although inflation was slightly higher and will likely be higher than RBI forecasts (~4.5%), it is unlikely to lead to any interest rate action next month. *We don't expect more than 90bps rate hike in reverse repo rate (or 50bps hike in repo rate) in FY23.
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