InvestorQ : What is the retail CPI inflation expected for August 2020?
indhumathi Sayani made post

What is the retail CPI inflation expected for August 2020?

9 months ago

The inflation number will be announced early next week for the month of August. However, we have the SBI Research estimates for retail CPI inflation which has hinted that the inflation for the month of August could slip and even give a bad shock to markets.

MOSPI will announce the August CPI inflation next week along with the break-up of rural and urban inflation as well as a product break-up of the basket. SBI Research team has highlighted that inflation for August could shoot above the 7% mark for August 2020.

However, the report has also given a positive undertone indicating that the CPI inflation could moderate back to the 4% levels around December this year. That would essentially imply that rate cuts by the RBI are almost ruled out for October and even December 2020.

Fitch has projected that GDP could contract by -10.5% for FY21, which is among the most pessimistic. If this contraction is combined with higher inflation, it could throw household budgets off track and any economy recovery could become that much tougher.