India CPI - Miles To Go Before RBI Sleeps: Systematix

Systematix Research Report

The fine print of the latest retail inflation continues to reinforce persistently high non-core amid slackening core inflation. Together they mirror a K-shaped trajectory engendered by real household income and consumption decelerating to multidecade lows.

As a fallout, the Giffin goods phenomenon has resulted in persistently high food inflation and budgetary constraints causing downtrading within necessary goods.

In the changed structural context, current inflation is still hurting households; RBI’s inflation target of 4% may be outmoded, it should be lower.

The ‘elephant named Inflation’ is not in the woods yet. Adapting from Robert Frost “Woods are lovely dark and deep, but RBI has promises to keep, and miles to go before it sleeps”

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