The consumer price index (CPI) data will be more critical than its index of industrial production (IIP) counterpart. IIP is expected to be at a similar level to November, rising marginally to 1.9 percent against 1.8 percent recorded in November. The range is likely to be between 0.5 and 2.6 percent, with expectations of a marginal rise.

Core industries, which comprise about 38-40 percent of the IIP rose 1.3 percent in December 2019 after four months of continuous decline. Coal production was up about 6 percent, electricity declined about 1.9 percent and manufacturing Purchasing Managers’ Index (PMI) has been on an upward trajectory for the past few months. The manufacturing PMI is broadly supportive of the recovery in the sector as a whole.

Auto production has decline about 5.2 percent in December and auto sales have declined about 13 percent in December with passenger car sales down by 8.4 percent.

For CPI, the estimate is in the range of 7.26 to 7.28 percent versus 7.35 percent in December. The CPI is expected to remain at similar levels as December with a possible mild moderation.

Vegetable prices have cooled but price pressures have sustained in other food items such as cereals etc. Core inflation is expected to inch up to about 4 percent against 3.7 percent in December.