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Tag: CPI inflation

  • India’s retail inflation spikes to six.30% in May: Govt information

    India CPI Inflation Rate May 2021: India’s retail inflation surged to six.30 per cent within the month of May, over and above the Reserve Bank of India’s (RBI) threshold of 6 per cent, information launched by the Ministry of Statistics & Programme Implementation (MoSPI) confirmed Monday.
    The retail inflation, which is measured by the Consumer Price Index (CPI), for the month of April was revised to 4.23 per cent from 4.29 per cent.
    This is the primary time in six months that the CPI information has come over the Reserve Bank of India’s (RBI) higher margin of 6 per cent. Prior to this, the CPI got here beneath the 6 per cent mark for 5 consecutive months. The authorities has requested the central financial institution to take care of retail inflation at 4 per cent with a margin of two per cent on both aspect for a five-year interval ending March 2026.
    The CPI information is especially factored in by the RBI whereas making its bi-monthly financial coverage. Earlier this month, the Monetary Policy Committee (MPC) of the central financial institution saved the repo fee unchanged for the sixth time in a row at 4 per cent whereas sustaining an ‘accommodative stance’ so long as essential to mitigate the impression of the second wave of the COVID-19 pandemic.

    The RBI has projected the CPI inflation at 5.1 per cent throughout the ongoing monetary 12 months 2021-22. It sees CPI inflation at 5.2 per cent in Q1, 5.4 per cent in Q2, 4.7 per cent in Q3, 5.3 per cent in This autumn with dangers broadly balanced.
    The Consumer Food Price Index (CFPI) or the inflation within the meals basket additionally spiked on-month throughout May to five.01 per cent, from 1.96 per cent in April, the information revealed.
    The spike in meals basket was on account of a pointy rise in costs of oils and which climbed 30.84 per cent on-year in May. Apart from this, the egg costs phase noticed an increase of 15.16 per cent whereas that meat and fish gained 9.03 per cent and pulses and merchandise rose 9.39 per cent. The greens phase slipped (-)1.92 per cent nonetheless fruits grew 11.98 per cent.
    Apart from meals and drinks, the gas and lightweight phase rose 11.58 per cent, clothes and footwear gained 5.32 per cent and the housing phase inched up 3.86 per cent.
    In a separate financial information launched earlier within the day by the Ministry of Commerce & Industry, the wholesale price-based inflation or the WPI accelerated to a document excessive of 12.94 per cent in May, owing to rising crude oil costs and value of manufactured items.

    How economists and market specialists reacted:
    Reacting to the inflation information, Rajani Sinha, Chief Economist & National Director – Research at Knight Frank India mentioned: “After five months of staying within RBI’s comfort band, the CPI inflation for May 2021 has again shot up above 6 per cent. The surge in inflation has been across all components including, food, fuel and core inflation. The WPI inflation has also inched up sharply in last few months in response to the rise in global commodity prices. For businesses, apart from raw material prices, labour price has also gone up in the last few months due to labour shortage. While the demand force in the economy remains weak currently, the concern is that the supply-side factors could continue to put upward pressure on inflation going forward.”
    Madhavi Arora, Lead Economist at Emkay Global Financial Services mentioned, “As seen in WPI inflation, CPI food inflation was up sharp 5 per cent partly led by seasonal factors while fuel inflation crossed double digits amid transmission of higher international prices to retail level. Core inflation also saw broad-based increase, making the YoY print high at 6.6 per cent. Rising input costs and higher wholesale inflation will concern the MPC, especially as today’s high inflation print would easily push up the average inflation for FY22 to 5.5+ per cent much higher than RBI’s estimate of 5.1 per cent. However, they may still choose to look through the spike in inflation in the near term, with the monetary reaction function currently hinging more on growth revival becoming sustainable.”

  • Low base impact pushes up IIP; cheaper meals cools inflation

    India’s industrial manufacturing grew by 22.4 per cent in March on the again of a low base impact from final yr when the nation had enforced nationwide lockdown to counter the unfold of Covid-19 pandemic, knowledge launched by National Statistical Office (NSO) on Wednesday confirmed. Index of Industrial Production (IIP) had recorded a contraction of 18.7 per cent in March 2020.
    Cumulatively, the economic output recorded a contraction of 8.6 per cent in 2020-21 as in opposition to a contraction of 0.8 in 2019-20. Before the affect of the second wave of the pandemic, the index worth of the IIP, nonetheless, confirmed enchancment on a sequential foundation, rising to 143.3 in March from 129.6. At these ranges, the IIP is 0.5 per cent decrease than the pre-pandemic stage of 144.1 in March 2019.
    Manufacturing sector output surged 25.8 per cent in March 2021, whereas mining output rose 6.1 per cent and energy technology elevated by 22.5 per cent in March.
    Going forward, IIP is more likely to take a success because of the affect of the second wave of the pandemic, economists mentioned. “In level terms the factory output in March 2021 is 106.9% of the pre-COVID period (February 2020). At broad based classification the manufacturing, electricity and mining output came in at 104.6%, 117.1% and 112.7% of the pre-COVID period… now with the second wave of COVID pandemic and associated local/partial lockdowns/curfew, it is unlikely that factory output will get any better in the near term. It is quite likely that there would be an adverse impact on the factory output over the next few months, yet the factory output on yoy terms would look good in 1QFY22 mainly due to the base effect,” Devendra Kumar Pant, Chief Economist, India Ratings & Research mentioned.

    ExpainedWeak demand circumstancesWeak demand circumstances have began reflecting in financial knowledge. Retail inflation charge eased regardless of affect of upper gasoline costs as core inflation — the non-food, non-fuel inflation part — which declined to a 10-month low of 5.43 per cent in April.

    Separately launched knowledge on inflation confirmed retail slowing to 4.29 per cent in April from 5.52 per cent in March, primarily on account of decrease meals costs. Food inflation charge eased to 2.02 per cent in April from 4.87 per cent in March this yr.
    The low meals inflation was primarily led by deeper deflation in cereals and merchandise to (-)3.0 per cent in April from 7.8 per cent in April final yr and better sequential deflation in vegetable costs to (-)14.2 per cent in April as in opposition to 23.6 per cent in April final yr. Higher inflation was recorded in April for gasoline and lightweight at 7.9 per cent and well being at 7.8 per cent. Health inflation has elevated sharply on account of COVID associated bills and has been greater than 5 per cent since October 2020.

    Weak demand circumstances have began reflecting in core inflation — the non-food, non-fuel inflation part — ,which declined to 10-month low of 5.43 per cent in April.
    “This fall is in spite of an increase in the inflation rate in the category of fuel and light. This pattern is indicative of the fact that while a cost push inflation is still operating through petroleum prices, lower demand for food and beverages, clothing and footwear, transport and communications and miscellaneous goods have driven the overall inflation down. The policy message is that the government needs to support demand without getting excessively concerned about the pressure on prices of petroleum products,” D Ok Srivastava, Chief Policy Advisor, EY India mentioned.

  • Retail inflation eases to 4.29% in April; IIP grows 22.4% in March: Govt information

    India CPI Inflation, IIP Growth Rate: The nation’s retail inflation, measured by the Consumer Price Index (CPI), eased to 4.29 per cent within the month of April. Separately, India’s manufacturing unit output, measured by way of the Index of Industrial Production (IIP), witnessed a progress of twenty-two.4 per cent in March, two separate information launched by the Ministry of Statistics & Programme Implementation (MoSPI) confirmed on Monday.
    The retail inflation in the course of the month of March was at 5.52 per cent.
    According to a latest Reuters ballot, retail inflation was anticipated to have eased to a three-month low of 4.20 per cent in April.
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  • Despite not being a coverage software, WPI surge a explanation for fear

    Wholesale-level inflation — measured by the Wholesale Price Index (WPI) — shot as much as 7.39 per cent in March on a year-on-year foundation. This is the best wholesale inflation price since October 2012, and was pushed largely by increased costs of crude oil and a surge in worth ranges of meals objects equivalent to pulses and fruits. The surge this March was additionally aided by a low base within the corresponding month of 2020.
    The WPI constituents
    While the Consumer Price Index (CPI)-based retail inflation — the extra broadly tracked coverage software — seems on the worth at which the buyer buys items, the WPI tracks costs on the wholesale, or manufacturing facility gate/mandi ranges.
    Between the wholesale worth and the retail worth, the distinction basically is the previous solely tracks primary costs devoid of transportation value, taxes and the retail margin and so on. And that WPI pertains to solely items, not companies. So, the WPI mainly captures the common motion of wholesale costs of products and is primarily used as a GDP deflator (the ratio of the worth of products an financial system produces in a specific yr at present costs to that of costs that prevailed throughout the base yr).

    The surge and its relevance
    There are two primary causes. The WPI information comes proper after the retail (CPI) inflation scaled a four-month peak of 5.52 per cent in March. In current years, the WPI and CPI have proven a level of dissonance, on condition that the WPI has a better weight of manufactured items and the CPI has a better structure of meals objects.
    The convergence of types in March is a warning signal, given {that a} increased print of each indices portends an financial phenomenon of an excessive amount of cash chasing too few items and companies.
    Two, there are considerations that the upper inflation on the wholesale aspect may finally spill over to the retail degree within the following months, particularly if the brand new lockdowns and restrictions hit provide chains.

    Although WPI numbers should not the Reserve Bank of India’s primary metric for the aim of setting financial coverage, the sharp spike in March may dissuade its Monetary Policy Committee from taking a look at price cuts effectively into the longer term, at the same time as yet one more financial disruption looms massive because of the Covid caseload surge. More disruptions may translate into increased inflationary expectations.

  • Retail inflation rises to five.52% in March; IIP contracts 3.6% in February: Govt knowledge

    India CPI Inflation, IIP Growth Rate: India’s retail inflation, measured by the Consumer Price Index (CPI), rose to five.52 per cent within the month of March. Separately, the nation’s manufacturing facility output, measured when it comes to the Index of Industrial Production (IIP), witnessed a contraction of (-)3.6 per cent in February, two separate knowledge launched by the Ministry of Statistics & Programme Implementation (MoSPI) confirmed on Monday.
    The retail inflation throughout the month of February was at 5.03 per cent.
    According to a current Reuters ballot, retail inflation was anticipated to have risen to five.40 per cent in March from a 12 months earlier.

    This is the fourth consecutive month that the CPI knowledge has come throughout the Reserve Bank of India’s (RBI) higher margin of 6 per cent. At the tip of final month, the federal government requested the RBI to take care of retail inflation at 4 per cent with a margin of two per cent on both facet for one more five-year interval ending March 2026.
    The retail inflation knowledge is primarily factored in by the RBI whereas making its bi-monthly financial coverage. Last week, the Monetary Policy Committee (MPC) of RBI saved the repo charge unchanged for the fifth time in a row at 4 per cent whereas sustaining an ‘accommodative stance’ so long as essential to mitigate the impression of the COVID-19 pandemic.
    The rise in retail inflation final month may be attributed to the rise in meals costs. The Consumer Food Price Index (CFPI) or the inflation within the meals basket rose to 4.94 per cent within the month of March, up from 3.87 per cent in February, the info revealed.
    The month-on-month rise within the meals basket was led by an increase in costs of oils and fat which rose a whopping 24.92 per cent in March, whereas that of meat and fish rose 15.09 per cent, the info confirmed. Non-alcoholic drinks gained 14.41 per cent whereas pulses and merchandise phase additionally witnessed an increase of 13.25 per cent and egg costs too rose 10.60 per cent. Vegetable costs, nevertheless, slipped -4.83 per cent on-year in March.
    Index of Industrial Production (IIP)
    India’s manufacturing facility output witnessed a contraction of (-)3.6 per cent on-year to 129.4 throughout the month of February, separate knowledge launched by the MoSPI confirmed.
    According to the info, the IIP had grown 5.2 per cent in February 2020.
    So far within the fiscal 12 months 2020-21 (April-February), the commercial sector has seen a contraction of (-)11.3 per cent, in comparison with a 1.0 per cent progress within the corresponding interval a 12 months in the past, the info confirmed.

    The contraction in IIP throughout February is totally on account of the manufacturing and mining sectors. The manufacturing sector noticed a contraction of -3.7 per cent on-year to 129.3 in February, whereas the mining sector witnessed a fall of -5.5 per cent to 116.5. The electrical energy sector however rose 0.1 per cent to 153.9, the MoSPI knowledge confirmed.
    In the corresponding month 12 months in the past, the manufacturing sector had risen of three.8 per cent, the mining sector had witnessed an increase of 9.6 per cent and the electrical energy sector had gained 11.5 per cent.
     

  • Retail inflation possible rose in March however stayed inside goal

    India’s retail inflation edged as much as a four-month excessive in March, led by a rise in meals and gasoline costs, however remained inside the Reserve Bank of India’s goal vary, a Reuters ballot predicted.
    The April 5-8 ballot of greater than 50 economists confirmed retail inflation rose to five.40% in March from a 12 months earlier versus 5.03% in February. Forecasts ranged from 4.60% to six.11%.
    “Although India’s core inflation has remained elevated for a while, the recent acceleration in headline inflation largely reflects higher food prices,” stated Tuuli McCully, head of Asia-Pacific economics at Scotia Bank.

    “I expect the pickup to be a temporary phenomenon, yet there are significant risks surrounding the inflation outlook.”
    The RBI raised its inflation projection for the primary half of this fiscal 12 months to five.2% on Wednesday, nonetheless inside the RBI’s goal vary of two%-6%.
    “With some cities already under COVID-19 lockdown and maybe more facing the same risk, the panic-buying like a year ago may set in to pressure inflation further up in the months ahead,” stated Prakash Sakpal, senior Asia economist at ING.
    The RBI stored the important thing repo price at document low 4.0% and its financial coverage accommodative amid issues of rising COVID-19 circumstances that would derail the nascent restoration.
    Asia’s third-largest financial system grew 0.4% within the Oct-Dec quarter after contracting for 2 consecutive quarters, its deepest recession in about 4 a long time.
    India reported a document 126,789 COVID-19 circumstances on Thursday and some states have renewed restrictions to comprise the unfold whereas complaining of vaccine shortages and demanding inoculations for youthful folks.
    A separate Reuters ballot final week predicted the most important threat to financial development was a surge in coronavirus circumstances and that the central financial institution would hold charges on maintain this fiscal 12 months.
    “The RBI will continue to see through elevated inflation and focus on supporting growth at least until the COVID-19 risk is firmly behind,” added Sakpal.
    The newest ballot additionally predicted industrial output contracted 3.0% throughout February from a 12 months earlier.

    Infrastructure output, which accounts for about 40% of whole industrial manufacturing and includes eight sectors, contracted 4.6% in February.
    Production of all eight core industries – together with coal, crude oil, pure fuel, petroleum refinery merchandise, fertilizers, metal, cement and electrical energy – shrank in February.

  • Retail inflation rises to five.03% in Feb; IIP contracts 1.6% in Jan: Govt knowledge

    The nation’s retail inflation, measured by the Consumer Price Index (CPI), rose to five.03 per cent within the month of February. Separately, India’s manufacturing unit output, measured by way of the Index of Industrial Production (IIP), witnessed a contraction of (-)1.6 per cent in January, two separate knowledge launched by the Ministry of Statistics & Programme Implementation (MoSPI) confirmed on Friday.
    The retail inflation through the month of January was at 4.06 per cent.
    This is the third straight month that the CPI knowledge has come inside the Reserve Bank of India’s (RBI) higher margin of 6 per cent.

    The authorities has mandated the central financial institution to maintain retail inflation inside the vary of 4 per cent with a margin of two per cent on both aspect. The retail inflation knowledge is primarily factored in by the RBI whereas making its bi-monthly financial coverage.
    The rise in retail inflation final month was primarily attributable to an increase in meals costs. The Consumer Food Price Index (CFPI) or the inflation within the meals basket rose to three.87 per cent within the month of February, up from 1.96 per cent in January, the info revealed.
    The month-on-month rise within the meals basket was led by an increase in costs of oils and fat which rose 20.78 per cent in February, whereas that of pulses and merchandise rose 12.54 per cent, the info confirmed. Non-alcoholic drinks gained 13.92 per cent whereas meat and fish section additionally witnessed an increase of 11.34 per cent and egg costs too rose 11.13 per cent. Vegetable costs nonetheless, slipped -6.27 per cent on-year in February.
    Index of Industrial Production (IIP)
    India’s manufacturing unit output or IIP witnessed a contraction of (-)1.6 per cent on-year to 135.2 through the month of January, separate knowledge launched by the MoSPI confirmed.
    According to the info, the IIP had grown 2.2 per cent in January 2020.
    So far within the fiscal 12 months 2020-21 (April-January), the commercial sector has seen a contraction of (-)12.2 per cent, in comparison with a 0.5 per cent progress within the corresponding interval a 12 months in the past, the info confirmed.

    The contraction in IIP throughout January is totally on account of the manufacturing and mining sectors. The manufacturing sector noticed a contraction of -2.0 per cent on-year to 135.1 in January, whereas the mining sector witnessed a fall of -3.7 per cent to 119.7. The electrical energy sector however rose 5.5 per cent to 164.2, the MoSPI knowledge confirmed.
    In the corresponding month 12 months in the past, the manufacturing sector had risen of 1.8 per cent, the mining sector had witnessed an increase of 4.4 per cent and the electrical energy sector had gained 3.1 per cent.

  • Retail inflation eases to 4.06% in Jan; IIP grows 1% in Dec: Govt information

    India CPI Inflation, IIP Growth Rate: India’s retail inflation, which is measured by the Consumer Price Index (CPI), eased to 4.06 per cent within the month of January 2021. Separately, the nation’s manufacturing facility output, measured when it comes to Index of Industrial Production (IIP), witnessed a progress of 1 per cent in December 2020, two separate information launched by the Ministry of Statistics & Programme Implementation (MoSPI) confirmed on Friday.
    The retail inflation through the month of December 2020 was at 4.59 per cent.
    This is the second consecutive month the CPI information has come inside the Reserve Bank of India’s (RBI) higher margin of 6 per cent. The authorities has mandated the central financial institution to maintain retail inflation inside the vary of 4 per cent with a margin of two per cent on both aspect.
    The retail inflation information is primarily factored in by the RBI whereas making its bi-monthly financial coverage. In its bi-monthly financial coverage assembly held final week, the Indian central financial institution had saved its key rates of interest unchanged and determined to keep up an ‘accommodative stance’ so long as needed for the fourth time in a row.
    Index of Industrial Production (IIP)
    India’s manufacturing facility output, which is measured in IIP witnessed a progress of 1 per cent on-year to 135.9 through the month of December 2020, separate information launched by the MoSPI confirmed.

  • Retail inflation grows 4.59% in Dec; IIP slips -1.9% in Nov: Govt information

    India CPI Inflation, IIP Growth Rate: The nation’s retail inflation, which is measured by the Consumer Price Index (CPI), eased to 4.59 per cent within the month of December. Separately, India’s manufacturing facility output, measured by way of Index of Industrial Production (IIP), witnessed a contraction of -1.9 per cent in November, two separate information launched by the Ministry of Statistics & Programme Implementation (MoSPI) confirmed on Tuesday.
    The retail inflation for the month of November was 6.93 per cent.
    The December CPI information has come throughout the Reserve Bank of India’s (RBI) higher margin of 6 per cent. The authorities has mandated the central financial institution to maintain retail inflation throughout the vary of 4 per cent with a margin of two per cent on both aspect.
    RBI primarily components in retail inflation whereas making its bi-monthly financial coverage. In its bi-monthly financial coverage assembly final month, the Indian central financial institution had saved its key rates of interest unchanged and determined to take care of an ‘accommodative stance’ so long as obligatory at the least by means of the present monetary 12 months.
    The decline in retail inflation in December was primarily resulting from easing meals costs. The Consumer Food Price Index (CFPI) or the inflation within the meals basket eased to three.41 per cent within the month of December, down from 9.50 per cent in November, the information revealed.
    The progress in inflation was primarily resulting from an increase in vegetable costs that surged 22.51 per cent on-year rise in December. Apart from greens, the eggs section noticed an increase of 21.81 per cent, whereas that of meat and fish rose 18.70 per cent and pulses and merchandise costs gained 18.34 per cent. The oils and fat section additionally witnessed an increase of 15.17 per cent.
    Index of Industrial Production (IIP)
    India’s manufacturing facility output, which is measured by way of IIP witnessed a contraction of -1.9 per cent on-year to 126.3 throughout the month of November, separate information launched by the MoSPI confirmed.
    The IIP had grown/slipped xx per cent in November 2019, the information confirmed.
    The industrial progress thus far within the fiscal 12 months 2020-21 (April-November) has contracted xx per cent, in comparison with a xx per cent rise within the corresponding interval a 12 months in the past, the information confirmed.
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  • RBI to be on a long-pause in charges on sticky non-food inflation: Report

    Image Source : PTI RBI to be on a long-pause in charges on sticky non-food inflation: Report
    The non-food element within the worth basket will proceed to maintain inflation at a excessive stage and lead to a “long pause” in rates of interest, a international financial institution mentioned on Wednesday. The central financial institution is prone to pare the pandemic-driven emergency response as effectively, the report by Singaporean lender DBS mentioned.
    It may be famous that the excessive inflation pushed by the meals costs has compelled the RBI to go for a established order in charges for the three consecutive critiques of the bi-monthly coverage conferences, whilst progress continues to be within the damaging territory. The RBI expects the GDP to contract by 7.5 per cent for FY21.
    The financial institution report mentioned over a six month interval, meals inflation is prone to ease, however non-food could also be sticky on account of rigidity in home gas taxation, marginal hikes in manufacturing prices after months of the shutdown, commodity worth rises, telecom worth changes and return in demand impulses in sure core classes.
    The current rally in commodities lends to contemporary cost-push affect, particularly industrial metals, it mentioned, stating that generic metal hot-rolled coil futures are up by over 80 per cent since late-September 2020, whereas on oil, Brent crude rallied 30 per cent within the December quarter.
    “While India’s CPI inflation is expected to ease, 2021 average inflation will stay above the 4 per cent target. Room for outright rate cuts is, thereby, limited, but the central bank will settle into a long pause, with a bias to anchor rates through strong dovish guidance,” as per the report.

    It added that an upcoming evaluate of the inflation targets is “unlikely” to lead to a fabric change. The 4 per cent inflation goal given to the Reserve Bank of India is up for evaluate post-March.
    The report mentioned going ahead, it expects the central financial institution to pare a part of the pandemic-driven emergency response at an incremental tempo and the identical will begin with a shift within the liquidity stance.
    The bias might be to maintain vital liquidity surplus, modulating the quantum by way of common channels, it mentioned, including lapse of the CRR (Cash Reserve Ratio) leisure, smaller doses of market stabilisation securities will organically faucet the liquidity brakes on the margin.
    If progress takes root in H2 FY22, a part of the ultra-accommodative bias is likely to be moderated, however in a calibrated method, it mentioned. It may be famous that RBI Governor Shaktikanta Das had up to now spoken about exiting the pandemic measures in an orderly method on the proper time.
    From an financial restoration perspective, it mentioned a push to exercise hinges on efficacy, deployment and timeliness of the vaccination programme and in addition underlined the challenges of what’s mentioned to be the most important vaccination programme on the planet.
    Plans to vaccinate all of the residents will quantity to Rs 57,000-80,000 crore of value, other than infrastructure and logistics prices, it mentioned, including that the fiscal value of the train is but to be finalised.
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