India Inc expects further improvement as IIP grows at 7.5%,

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Analysts polled by Reuters had forecast February's consumer price inflation to ease to 4.80 percent from 5.07 percent in the previous month.

The Index of Industrial Production (IIP) had grown at 7.1 percent in December 2017, according to the data released by the Central Statistics Office (CSO) today.

In January, retail inflation had declined to 5.07% while the inflation based on wholesale prices had eased to a six-month low of 2.84%. Consumer price inflation (CPI) was at 5.07% in January.

While the manufacturing sector grew 8.7% in January, compared with 2.5% in the same month past year, capital goods grew 14.6% and consumer non-durables 10.5% in the month under review.

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Further, the cumulative growth for the period April - January 2017-18 over the corresponding period of the previous year stands at 4.1 percent.

The deceleration in CPI inflation will nudge the Reserve Bank of India (RBI) to hold off on hiking key repo rates as it sounded hawkish at the Monetary Policy Committee (MPC) meeting last month.

Meanwhile, the Consumer Price Index inflation for February fell to 4.44% for February 2018 compared to the same month in 2017. It grew by 8.7 percent during the month as compared to 2.5 percent in January 2017, showing signs of recovery in the economy. In January, retail prices of vegetables rose almost 30%. In terms of industries, 16 out of 23 industry groups in the manufacturing sector showed positive growth during January, 2018.

"Given the outsized jump in apparel prices in January, we would not be surprised to see a negative print in February" for apparel prices, he said in a note last week. "Domestic pump prices of petrol and diesel rose sharply in January, reflecting lagged pass-through of the past increases in global crude oil prices". Other categories - including hospital services and motor vehicle insurance - that fueled January's core inflation increase may also slow, Sharif said, forecasting a gain in the core index of 0.16 percent.

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