Retail inflation, IIP data to come today: Here's what experts expect

India's industrial production (IIP) data for January and retail inflation data for February are expected on Tuesday, March 12.

India's consumer price index (CPI)-based retail inflation might come near 5 per cent in February, staying comfortably below the 6 per cent upper tolerance band of the Reserve Bank of India (RBI).

A median estimate of 20 economists polled by Mint showed India's retail inflation is expected to come in at 5.08 per cent in February.

Among the economists polled by Mint, projections ranged from 4.90 per cent to 5.50 per cent, with only three of them expecting inflation to rise from the previous month.

Also Read: February retail inflation seen at 5.08%: Mint poll

Analysts at Barclays forecast CPI inflation rose slightly, to 5.3 per cent, in February, with a modest sequential rise in food and core prices. They expect core inflation to inch up to 3.6 per cent year-on-year against January's 3.5 per cent.

Also Read: India CPI inflation preview: Retail inflation likely to come near 5% in Feb; RBI to stay on sidelines for longer

While most analysts believe retail inflation could come near the 5 per cent mark, they aappear remarkably divided in their views on IIP prints.

According to Aditi Nayar, Chief Economist, Head of Research and Outreach at ICRA, the CPI inflation might have remained flat at 5.1 per cent in February 2024, with the anticipated easing in vegetable prices not materialising.

On the front of IIP, Nayar projects it to ease mildly to 3.4 per cent in January 2024 from 3.8 per cent in the previous month as core sector growth slid to a 15-month low of 3.6 per cent in January 2024.

On the other hand, Dharmakirti Joshi, Chief Economist at CRISIL expects IIP at 5 per cent and CPI at 4.9 per cent.

Sujan Hajra, Chief Economist at Anand Rathi Shares & Stock Brokers expects retail inflation to come at 5.07 per cent, slightly above the last month's level.

However, Hajra expects the industrial production growth for January 2024 is poised to slightly exceed 5 per cent, marking an improvement from December 2023.

"Our forecasts for both inflation and industrial production growth surpass consensus expectations," said Hajra.

Hajra pointed out that barring any substantial deviations from consensus expectations, these data points are unlikely to significantly impact financial markets.

"The outlook for Indian financial markets, including equities and debt, remains optimistic over the medium to long term, with low expected volatility in the foreign exchange market," said Hajra.

Brokerage firm Nirmal Bang expects CPI inflation to moderate marginally to 4.95 per cent while it expects core CPI inflation to sustain its moderating trend and come in at 3.5 per cent in February versus 3.6 per cent in January.

The brokerage firm expects the Index of Industrial Production (IIP) growth at 4.1 per cent YoY in Jan’24, marginally up from 3.8 per cent YoY in December 2023.

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Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.