Average CPI inflation for next year likely in 4.5-5% range: A Prasanna

Industrial production soars during November hitting a 25 month high with 8.4 percent growth. Retail inflation at 5.2 percent in December is in line with expectations.

In an interview with CNBC-TV18, A Prasanna, Chief Economist at I-Sec PD shared his readings and outlook on the same.

Prasanna said we expect more upside growth in manufacturing.

He further said that we see a favourable base impact in Index of Industrial Production (IIP).

We expect retail inflation to remain above 4 percent target, he added.

Talking about US Fed, he said the Fed could raise rates four times based on US growth outlook.

On CPI front, he said average consumer price index (CPI) inflation for next year is likely to be in 4.5-5 percent range.

"For new 10-year, my range would be around 7.25-7.5 percent, so add another 20 bps to that for the old 10-year because we are quite negative on the Budget so the caveat is that if the government does surprise in terms of the fiscal deficit then we won't see 7.5," he said.

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