Moderation in Consumer Durables Shows Consumer Demand Softening
Softening of headline inflation to under 6% in Nov’22 was supported by a moderation in some of the food components such as vegetables, which is mostly a seasonal movement. The fuel prices have remained stable limiting upward pressure in inflation. However, rupee depreciation which has made imports expensive along with demand revival added to inflationary pressure. The inflation print within the RBI upper tolerance range of 6% will provide comfort in the policy setting and interest rate action framework in coming months comforting both households and corporate borrowers. Industrial production has decline by 4%. The manufacturing output, which has the maximum weightage in the index, is yet to show a strong recovery. Although, the manufacturing sector performance as seen in PMI and improving capacity utilisation has remained strong, we are yet to see its transmission into the industrial production activities. Moderation in consumer durables is an indication of some softening in consumer demand in the economy.
Tags : moderation consumer demand inflation fuel prices imports industrial products