Can Indian inflation fall below 4% and economic growth remain strong in 2024? Here's what experts say "Some base effects should also help pull down inflation in the clothing and footwear, and miscellaneous categories. Households' near-term (three months ahead) inflation expectations also have declined, though one-year ahead expectations have risen. Input and output price PMIs for the manufacturing sector for December also remain contained," Barclays said.
Food inflation likely rose on year-on-year terms due to a low base, while lower fuel and core inflation should offset the rise to some extent, said the global financial firm. Also Read: SBI study questions flawed narrative of K-shaped recovery, highlights five major trends of Indian economy The December CPI print is due on Friday, January 12. Barclays expects food inflation to rise to 8.3 per cent in December from 8 per cent in November.
It expects on a sequential basis, food CPI to fall 1.1 per cent month-on-month, aided by a sharp correction in the prices of onions and tomatoes, and early signs of easing momentum in prices for pulses, cereals, spices and sugar – the other staples that have been driving food inflation in the past few months. Barclays said after rising sharply in November, retail prices of onions have begun cooling down and are gradually retracing back to October levels. "The government extended the export ban on onions until March 2024, and procurement through local agencies has contributed to increased availability, thereby leading to lower prices.
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