February 18, 2024
Eyes on India's December Inflation Data Amid Global Trends
Finance Economy Inflation

Eyes on India’s December Inflation Data Amid Global Trends

Eyes on India’s December Inflation Data Amid Global Trends (Agencies)

Eyes on India’s December Inflation Data Amid Global Trends

As global attention turns to inflation trends, India anticipates its consumer price index (CPI)-based inflation data for December. Following the US consumer price inflation exceeding expectations, analysts project a modest rise in India’s CPI, largely attributed to increased prices of pulses, tomatoes, and onions.

In October, India’s CPI-based inflation stood at 4.87%, rebounding to a three-month high of 5.5% in November. Elevated food prices are expected to contribute to a potential uptick in December’s retail inflation. Analysts offer varying expectations, with Emkay Global Financial Services projecting 5.88% for December CPI, while Anand Rathi Shares & Stock Brokers expects 5.72%.

Barclays estimates a modest rise to 5.6% year-on-year in December, primarily influenced by unfavorable base effects. Core inflation, excluding volatile items like food and fuel, is anticipated to ease to 3.99%.

A Mint poll suggests that India’s retail inflation likely increased for the second consecutive month to 5.9% in December, with projections ranging between 5.5% and 6.4%.

The recent US CPI data, exceeding expectations, has impacted global market sentiment. The rise to 3.4% year-on-year in the US may delay the expected rate cut by the Federal Reserve, potentially influencing the Reserve Bank of India’s monetary policy decisions.

V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, notes that the delay in the US Fed’s rate cut may postpone the Reserve Bank of India’s potential rate cut, which was initially expected in March, possibly now extending to June. These global and domestic inflation trends are closely watched for their implications on monetary policy and market sentiments.

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