INSUBCONTINENT EXCLUSIVE:
showed that factory output contracted by 0.3 per cent after growing at 1.8 per cent in November.
Also, retail inflation rose to 7.59 per
On the inflation front, higher vegetable prices pushed up the CPI index further up thereby shrinking the room for a further cut in rates by
While, unexpectedly IIP has contracted to 0.3% in Dec from 1.8% in Nov
expect RBI to cut interest rates or change its accommodative policy stance.
Nikhil Gupta, Chief Economist, Motilal Oswal Financial
ServicesOverall, the concerning combination of weaker growth and higher inflation remained in December
Rate cuts are things of the past and Q3FY20 GDP growth will be definitely lower than in Q2FY20.
Govinda Rao, Chief Economic Advisor,
Brickwork Ratings Food inflation is likely to subside in the coming months, but rising core inflation, up from 3.5% to 4.2%, is a cause for
renewed concern, as there is fear of further escalation in the prices of services items
becomes minimal.
Moreover, December IIP numbers are really worrying with the manufacturing sector reporting a negative growth of 1.2%,
leading to a contraction of 0.3% in overall IIP growth
Despite the negative IIP growth, if the recent revival in eight core activities and PMI manufacturing index sustains, we can expect some
improvement in the industrial activity in the last quarter of the current fiscal
Care RatingsRetail inflation is expected to remain above 6 per cent for the next two months on account of low base effect and sustained
inflation in the food segment arising from pulses and telecom and communication charges
We expect retail inflation to average around 4.5-5 per cent for FY20
With high inflation, the RBI may not go for a rate cut in their next meeting in April.
