After six months of rising inflation, we finally see a downward move in Feb 2016, which comes in at 5.18% after last month’s 5.69%. Looking at things from a component perspective, Food Inflation has eased off the most , falling to 5.5% while Fuel inflation too is at at low of 4.6%. Transport costs, however, have gone up (though at 2.4% this is hardly inflationary). This time, both rural and urban inflation has fallen : However, “Core” CPI – the stuff after you remove food and fuel – is going up. It’s still at 4.77% which is not a major concern yet. But it’s a reflection of secondary inflation, the kind that is difficult to reduce. This is the highest core CPI inflation number we have seen since November 2015 – a fifteen month high ! Our View: RBI Likely To Cut Rates It should be fairly obvious now that the data says: Lousy IIP numbers, two months in a row (negative) means lower growth. … (Read On…)
[via Capital Mind]
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