Data Preview - CPI Seen At 5%; Wholesale Price Index At 3.6% In June And IIP At 5.2% In May: Nirmal Bang

Nirmal Bang Report

Consumer Price Index inflation is likely to edge up to 5% in June-24 from 4.75% in May-24 due to food inflation, primarily on account of high vegetable prices. Core CPI inflation is seen bottoming out but it is likely to remain muted at 3.2% in June-24.

Wholesale Price Index inflation is also likely to rise to 3.6% in June-24 from 2.6% in May-24, led by higher food inflation. Core WPI inflation is seen at 0.45% in June-24 versus 0.12% in May-24. We expect CPI inflation to average ~4.8% in FY25 mainly on account of food price volatility. We expect only one rate cut from the RBI in FY25, most likely in Feb-25.

Index of Industrial Production growth is likely to remain relatively steady at 5.2% YoY in May-24 versus 5% YoY in April-24, supported by steady Manufacturing PMI and core infrastructure output.

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