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Perspective on the CPI Numbers for July 2022 by Mr Mohit Ralhan, Managing Partner, TIW Capital Group

“The inflation appears to be easing with CPI coming at 6.71% in July in comparison to 7.01% in June. It looks like the peak of inflation was 7.79% in April and the trend is downwards. Still, as far as inflation is concerned India is not out of woods as it remains above 6% now for 7 months. RBI will be hard pressed to bring the inflation down to below 6% as it will need to submit a report to the government if inflation remains above 6% for one quarter more. The dependency on global factors including energy prices and geopolitical environment is high and RBI is likely to continue increasing interest rates further over the next few months. The IIP growth of 12.3% in June is lower than 19.6% in May, it is quite ahead of the estimated 10%-11% number. Irrespective of the lower base effect, it indicates that factory output is moving in the right direction and give more headroom to RBI for policy manoeuvring.”

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