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Below Perspective on WPI inflation data for January By Mohit Ralhan - Chief Executive Officer, TIW Capital

"The WPI has further eased to 4.73% in January. It’s quite significant since it is coming after surprisingly higher retail inflation of 6.52%. The downward trend in WPI has been continuing since May-2022, while the YoY CPI change numbers have been more volatile. If we just look at the absolute level of the CPI index, then it has remained between 175 and 177 since September 2022. Reading this data together with WPI indicates that inflation is likely to trend downward in the coming quarters as well. On the downside, there was a significant climb up in food inflation within the WPI composition, therefore we need to remain cautious. RBI will continue to wait for more evidence of a structural decline in inflation before pivoting its policy stance. Also, global macroeconomic factors have still not eased and RBI also needs to closely monitor the policy roadmap taken by US Fed and assess its impact on India. The economy is at a critical point where now both inflation and growth need equal policy attention"

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