SBI: February IIP numbers may touch double-digit

Representation picFollowing the softening of consumer price index CPI inflation and a 75 percent hike in the Index of Industrial Production IIP numbers the State Bank of India opined that the latter may touch doubledigit figures in February this year In a report authored by SBI Group Chief Economic Adviser Dr Soumya Kanti Ghosh the stateowned lender said the 75 percent jump was due to steep growth in manufacturing and electricityTalking about the dip in retail inflation Ghosh in his report projected that CPI inflation in March would hover around the same range As expected CPI inflation eased to 444 percent in February 2018 compared to 507 percent in the previous month with all the components witnessing a decline in prices except for health clothing and footwear transport and communication Signs of a thaw in rural demand were visible with rural CPI crashing by 84 basis points from the earlier month the report statedHowever the SBI noted that with March CPI around 4445 percent the Q4 actual CPI numbers could undershoot the Reserve Bank of Indias RBI projections of 51 percent for the quarter by around 4050 bps If conditions remain the same RBI inflation projection for FY19 at 5156 percent for the first half and 4546 percent for the second half will be undershot by 4050 bps for the next fiscal as well despite minimum support price MSP implementation as the central banks studies show that MSP implementation does not lead to significant increase in food prices the SBI saidWith a fall in vegetable prices and recent financial market developments the report highlighted that a Pandoras Box has been opened for the RBI awaiting its response However the SBI in its report stated that one shortcoming of inflation targeting is that it may neglect important information about the buildup of financial imbalances given that these developments do not materialise rapidly into consumer price pressuresThe surge on the yield on the 10Year Government Security Gsec during Q3 FY18 has impacted the marktomarket MTM losses for banks on their investment portfolios during Q3 FY18 This will pose further risk to financial stability it added Data released by the Ministry of Statistics and Programme Implementation suggested that Indias retail inflation had eased to 444 percent in February from Januarys 507 percentThe general index for the month of January 2018 stood at 1323 thus registering a 75 percent growth as compared to January 2017 Also the cumulative growth for the period April January 201718 over the corresponding period of the previous year was 41 percentMeanwhile Economic Affairs Secretary Subhash Chandra Garg opined that given the increase in IIP numbers industrial growth would henceforth be strong and comprehensive now Consumer Price Indexbased inflation moderates further in February From 51 percent in January it comes down to 44 percent Food Price Index part of CPI also declines from 47 to 33 percent Strong IIP growth of 75 percent in January capital goods grow by 146 percent manufacturing at 87 percent infrastructureconstruction goods at 68 percent Industrial growth is strong and comprehensive now he tweetedCatch up on all the latest Crime National International and Hatke news here Also download the new midday Android and iOS apps to get latest updatesThis story has been sourced from a third party syndicated feed agencies Midday accepts no responsibility or liability for its dependability trustworthiness reliability and data of the text Midday managementmiddaycom reserves the sole right to alter delete or remove without notice the content in its absolute discretion for any reason whatsoever