Home / Business / Money / Jan CPI seen around 5.3-5.8% on new base yr, Dec IIP at 2%

Jan CPI seen around 5.3-5.8% on new base yr, Dec IIP at 2%

The index of industrial production (IIP) data is easier to predict because there is no new base but the estimates of IIP this time is that it should come in at around 1.8 to 2 percent against 3.8 percent on a month-on-month basis.

The January consumer price index (CPI) data which is expected today will be crucial as this will be the first CPI data on a new base. The government has revised the CPI data base year from 2010 to 2012 couple of weeks ago due to which there are varied expectations. The CPI data for January is likely to be in the range of 5.3 to 5.8 percent on the upside against 5 percent reported in December. 

The weightage to food and beverages is lower in this CPI data whereas services is higher, so it is expected that the food and services inflation would come in even though at an elevated level, it won’t contribute as a whole on the upside for the CPI data. Hence, it could be negated at a holistic level and that will be the key point to watch out for with regards to the CPI data.

The index of industrial production (IIP) data is easier to predict because there is no new base but the estimates of IIP this time is that it should come in at around 1.8 to 2 percent against 3.8 percent on a month-on-month basis.

The reason being that in the last month manufacturing had risen because there were more working days in November of 2014 as compared to November of 2013. So this month will give a clear indication of how things are on a year-on-year basis but it will benefit from a low base as well because it was a growth of only 0.1 percent in December 2013.

The core sector data came down to levels of 2.4 percent versus five-month high of 6.7 percent on a month-on-month basis with electricity and coal production slowing down. So these kinds of constituents will weigh on the entire December IIP data and one may see a slowdown coming in for the December IIP as compared to November.

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