InvestorQ : What is your quick view on the inflation and IIP numbers announced last week end?
Anamika Sodhani made post

What is your quick view on the inflation and IIP numbers announced last week end?

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Angel dcosta answered.
3 weeks ago
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Both inflation for Oct-21 and IIP for Sep-21 were announced on 12-Nov. Retail inflation was 13 bps higher at 4.48%. That was apparently driven by a 17 bps spike in food inflation from 0.68% to 0.85%. But the real villain was sharply higher core inflation, which is the non-oil, non-food structural inflation that tough to manage. Core inflation spiked 31 bps to 6.11% as a result of supply chain bottlenecks and downstream effects of high crude oil prices.

On the other hand, IIP is growing slowly but is getting more durable at 3.06%. This is despite zero base effect and that is what makes this growth in IIP more credible. Now the industrial growth or IIP is finally getting well above pre-COVID levels, despite 2 lost years. It now looks like monetary policy has done enough for growth and rest has to be done by fiscal policy as well as the internal momentum of the economy to boost IIP.

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