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We Indians could not have asked for such a dream run!! RBI lowers interest rates, Budget gives stimulus, IIP for Dec bounces back and now retail inflation for January shows that it is at 19-month low at 2.05% v/s 2.11% in Dec. But the question is – are all of us experiencing, on the ground, what these statistical figures are showing?

Take a look at the CPI internals: (MoM)

  • Food inflation at -2.17% v/s -2.51%
  • Vegetables at -13.3% v/s -16.14%
  • Pulses at -5.5% v/s -7.13%
  • Fuel and light at 2.2% v/s 4.54%
  • Housing inflation at 5.2% v/s 5.32%
  • Clothing and footwear at 2.95% v/s 3.52%
  • Household goods and services inflation at 2.95% v/s 3.52%
  • Transport and communication at 3.44% v/s 4.30%
  • Health inflation fell to 8.93% v/s 9.02%
  • Education inflation at 7.99% v/s 8.38%

But now in February, all of us who go to buy fruits, vegetables and other food items, are already witnessing a rise in costs. Thus in the coming months, as summer starts approaching, we could see CPI bounce back from this 19-month low.

On IIP – for Dec it has come in subdued at 2.4% v/s revised figure for Nov at 0.3% and much lower than Dec’17 IIP of 7.3%. April-December FY19, IIP rose 4.6% v/s 3.7% (YoY).

Internals of IIP: (MoM)

  • Manufacturing at 2.7% v/s 0.4%
  • Mining at 1% v/s 2.7%
  • Electricity at 4.4% v/s 5.1%
  • Capital goods at 5.9% v/s 3.4%
  • Consumer durables at 2.9% v/s 0.6%
  • Primary goods at 1.2% v/s 3.2%
  • Intermediate goods at 1.5% v/s 4.5%
  • Infra/construction goods at 10.1% v/s 5%

In terms of industries, 13 out of 23 groups in the manufacturing sector have shown positive growth during the month of December 2018 (YoY). The industry group ‘Manufacture of tobacco products’ has shown the highest positive growth of 27.9%, followed by 17.9% in ‘Manufacture of other transport equipment’ and 16.5% in ‘Manufacture of wearing apparel’.

On the other hand, the industry group ‘Manufacture of furniture’ has shown the highest negative growth of (-) 18.7%, followed by (-) 16.4% in ‘Other manufacturing’ and (-) 5.4 in ‘Manufacture of coke and refined petroleum products’.

The highest positive contributor to the IIP were Sunflower Oil, Electricity,  Galvanised products of Steel (including colour coated, tin plates, TMBP and Tin free steel), Electric heaters and Sugar.

The highest negative contributors to the IIP are diesel, copper rods, bars and wire rods, API & formulations of hypo-lipidemic agents, pig iron and petrol/ motor spirit.

So this month of Feb has been a bonanza all along for all macro data! Really, things cannot get any sweeter. Or maybe they will as we head into election in a couple of months?

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