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The Economy Observer: Retail inflation eases to a five-month low in March 2018

  • CPI inflation eased slightly to a five-month low of 4.3% in March 2018 from 4.4% in the previous month.The number was higher than our/market consensus estimate of 4%/4.1%.
  • Like in the previous month, the decline in headline inflation in March 2018 was led by a sharp fall in vegetables inflation. While food inflation eased to a five-month low of 2.8%, core CPI touched a 43-month high of 5.2%.
  • IIP rose by 7.1% in February 2018, lower than our estimate of 7.6%, but higher than consensus of 6.8%. Output of consumer goods and capital goods rose sharply, aided by a favourable base, leading to a surge in IIP.