India’s CPI inflation moderated to a 10-month low of 4.85% YoY in Mar-24 vis-à-vis 5.09% in Feb-24.
Download ReportQuantEco Research || Mar-24 CPI - The slow descend
India’s CPI inflation moderated to a 10-month low of 4.85% YoY in Mar-24 vis-à-vis 5.09% in Feb-24. The key highlight was the strengthening of disinflationary impulse from reduction in retail fuel prices along with persistence of core inflation at record low levels. Meanwhile, food inflation continues to display stickiness at elevated levels. With the IMD forecasting above severe heat waves in the summer season, perishables food items could be vulnerable to sporadic supply shocks. However, the impact would be short-lived, as build-up of La Nina conditions bodes well for a normal monsoon outturn, which in turn should help douse transient food supply shocks. The pass-through from recent hardening of global commodity prices would be limited as long as further price pressures face resistance. Notwithstanding risks, we believe the disinflationary momentum led by fuel and core items would continue to have a salubrious influence on the headline CPI inflation. As such, we maintain our FY25 CPI inflation forecast of 4.5% vs. 5.4% in FY24.