FE
The Reserve Bank of India’s (RBI) monetary policy action may be credited for reducing core Consumer Price Index (CPI) inflation in the recent months, but a sub-4% core print also denotes weak demand conditions in the country at an aggregate level, say economists.
Curiously, this is also a bit at odds with the RBI’s assesment in its November bulletin that “investment demand appears to be resilient given the government’s infrastructure spending, an uptick in private capex and digitalisation.” Concerns were even expressed by the central bank about another possible spell of demand pull inflation.
Data released on Friday showed core CPI inflation fell to a 48-month low of 3.9% in December from 4.1% in November, while CPI inflation rose to a four month high of 5.69% from 5.55%.
