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December CPI inflation likely to trend higher, says SBI report

Author: IANS/Thursday, January 11, 2018/Categories: Economy

December CPI inflation likely to trend higher, says SBI report

New Delhi - The country's consumer price index-based inflation for December is expected to remain at an elevated level and range between 5 and 5.2%, a State Bank of India (SBI) report said.

"CPI inflation came in at 4.88% in November 2017, surpassing the already high expectations of the market. And for December 2017 as well the numbers are expected to remain elevated. We project CPI inflation to come in between 5-5.2%," the SBI Ecowrap report said.

The report comes just days before the Central Statistics Office (CSO) is expected to release the CPI data for December.

However, the report disclosed that the higher rate of inflation is "primarily due to base effect.

"The average for Q3 FY18 will come around 4.5% on yearly basis compared to 3% in Q2 FY18. We expect the Q4 FY18 average at 4.8%," the report said. 

"Inflation for the Jan'18-Jun'18 period is likely to be on the higher side owing primarily to base effect (average inflation for Jan'17-Jun'17: 2.89%). Interestingly, some inflation numbers in the first half of 2018 could print over 5.5% and this could be a source of negative surprise."

The report added that it expects that on a net basis CPI inflation will remain modest in FY19 at 4.5%.

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