It's a double macro cheer - retail inflation has softened to 4.4 percent in February while industrial output has strengthened to 7.5 percent. In an interview to CNBC-TV18, Sonal Varma, MD & Chief India Economist at Nomura Financial Advisory & Securities (India) Private Limited spoke at length about the numbers.
Varma said that we are seeing some sign of moderation even in core inflation.
She further said that fall in food prices across the board was a surprise.
According to her, February consumer price index (CPI) inflation likely to undershoot Reserve Bank India’s (RBI) Q4 CPI forecast by 40-50 bps.
Talking about MSP, she said that government may look at mix of fiscal incentive and higher minimum support price (MSP) to alleviate farm stress.
On inflation front, she said underlying inflation trend likely to remain around 4.5 percent for next 12 months.
She also mentioned that RBI is likely to remain on hold in the next policy.
We are expecting 7.5 percent GDP growth in CY18.
For entire interview, watch accompanying video.
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