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Below the Perspective on CPI & IIP Data by Mr. Nikhil Gupta, Chief Economist, MOFSL Group.

Headline CPI inflation came in at 6.2% YoY last month, the highest in 14 months and higher than market consensus of 5.9% (our forecast of 5.8%). The acceleration was broad-based, with food and core inflation coming in higher than expected.

On the other hand, IIP growth was 3.1% YoY in Sep'24, slightly better than market consensus of 2.5% (our forecast was 4%). It implies IIP growth of 2.6% in 2Q, weakest in 7 quarters.

Overall, the combination of weak growth and high inflation in India is not favourable in a period when many global CBs are cutting rates. In any case, we stick with our forecast of first rate cut by the RBI in Feb'25, assuming a sharp deceleration in 2Q GDP growth and its outlook.

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