Strategy Note /
India

IN : Strategy - Inflation rises; IIP contracts further

    Jay Shankar
    CGS-CIMB
    16 April 2021
    Published by

    Headline CPI inflation in Mar rose further to 5.52% after touching a 16-month low of 4.06% in Jan, while IIP contraction deepened in Feb. Inflation is likely to average 5% in FY22, after clocking 6.2% in FY21. IIP is expected to remain very weak and volatile in 2021, with nascent recovery. Key monetary policy rates are likely to remain accommodative through 2021. The 10-year yield is likely to remain below 6.1 until Sep 2021.