InvestorQ : What is your view on the inflation and IIP numbers announced on 12 July?
Lavanya Subramanian made post

What is your view on the inflation and IIP numbers announced on 12 July?

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Anamika Sodhani answered.
5 months ago
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12 July was the day when the MOSPI announced the data for inflation and IIP growth. The CPI inflation for Jun-21 was marginally lower at 6.26% compared to 6.30% in May 2021. On the one hand, core inflation fell from 6.55% to 6.19% but food inflation was up from 5.01% to 5.15% largely on the back of delayed monsoons. Fuel inflation was up sharply from 11.6% to 12.68% while transport inflation came in at 11.56% on consistent fuel price hikes.

On the growth front, the IIP growth for May-21 came in at 29.3% yoy, but this can again be largely attributed to the base effect. However, a better way is to look at it in sequential terms, wherein the IIP was down -8% over April. This is clearly indicative of the rising stress caused by COVID 2.0. Manufacturing IIP was up 34.5% yoy and it has a large weightage of 77.6% in the overall IIP basket.

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