Perspective on CPI numbers By Mr. Vivek Rathi, Knight Frank India
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Below is Perspective on CPI numbers By Mr. Vivek Rathi, Director Research, Knight Frank India.
“While the CPI inflation level at 4.91% is within the central bank’s target range, it is still on the higher side of the band and has trended higher for second straight month. Fuel and transport costs remained the main constituents that pushed the level higher in this reading. These categories exert cost pressure on various input items. However, the extent to which increased costs are passed on to consumers will depend on the strength of demand in respective product categories. Although not a concern at present, elevated price levels will discomfort consumers when demand levels improve. Considering the high inflationary expectations, RBI will be watchful of the inflation level, and we hope that benign interest rates continue considering capital intensive sectors like real estate are strongly influenced by credit costs at both consumer and developer level.”
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