November WPI inflation at 0.58%: Experts discuss RBI's likely course of action

With regards RBI interest rate trajectory, she said more than focusing on quantum of rate cuts, the focus should be on the direction.  "I don’t think we have taken a U-turn as yet, it is a small pause, not a very big speed breaker as of now,” Iyer said.

Meanwhile, Rajni Thakur said, the only difference between the WPI and the CPI has been in terms of the weightage that we attach to the primary article. "Basically, the narrative remains the same, only the food prices have gone up - 9.02 percent is the number, which is less than expected. The key message remains the same that the manufactured product is still on the deflationary trend and the primary articles are gaining, which could be temporary and could settled down,”  she mentioned.

Giving her inflation forecast for March, Thakur said, “Given that medical prices or some of the services could increase, we don’t see major uptick in overall inflation number unless the demand conditions improve in the next six months. To that extent, we are expecting CPI to be within the 5.5 percent to 6 percent at the max and then recede back to 4.5 percent to 5.1 percent number.”

On rate cut perspective, Thakur noted, “The two key events right now are the budget and any signs of pick-up in demand. So growth impetus and budget would be key for the next rate call and till then the overall space left for further cuts is 40-60 basis points (bps) depending on whichever way you calculate. So Reserve Bank of India (RBI) is likely to be very prudent in using that space to support growth.”