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January inflation cools off higher than anticipated

ICICIdirect Research 14 Feb 2025 DISCLAIMER

CPI inflation came down to 4.3% in January from 5.2% in December, vs market expectation of around 4.5%.

Food inflation which was the major contributor has continued its declining trend in last 3 months with January Food inflation is now at 6.02% Vs 8.4% in Dec Vs 9.0% in Nov and 10.9% in Oct.

Core inflation came marginally lower at 3.6% Vs 3.7% in Nov. (Avg since last 12 month at 3.4%).

RBI projected Q4 FY25 inflation at 4.4% and therefore January print at 4.3% provides the much needed comfort for another rate cut as next month’s print is also at similar levels. RBI growth projection for Q1 is 6.7% Vs market expectation of around 6.5% and therefore if RBI lowers growth projection, it may justify another cut-rate.

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