CPI Inflation - Good News Continues:: Edelweiss

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CPI inflation in December increased to 5% YoY (Edelweiss estimate: ~5.5%) versus ~4.4% in November, mainly on the account of base effects. Barring base effect in fruits and vegetables, CPI further disinflated by ~40bps to 5.1% YoY, with broad based disinflation. With this print, CPI has disinflated by ~500bps over the last 12 months and has taken everybody (including the RBI) by surprise. We expect March 2015 CPI to be ~5.5% (below RBI’s projection of 6%). The disinflation process should continue into FY16 as well, as the cascading impact of lower oil and commodity prices feeds through the economy.

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https://www.edelweiss.in/research/CPI-Inflation--Good-News-Continues/28011.html