SBI Ecowrap Report

SBI Ecowrap Report: The report (published by SBI's Economic Research Department) released recently, provides a detailed analysis of India's economic landscape in February 2025.

• Key focus: CPI inflation, industrial growth, imported inflation, and corporate performance.
• About SBI Ecowrap Report: It analyses the Indian economy, covering GDP growth, and agricultural reforms, formal and informal economies.
• Highlights a significant moderation in inflation and projects future trends in monetary policy and industrial output.
• About Inflation: Rise in prices of goods and services, leading to decreased purchasing power and erosion of cash value.
• Measurement in India:

o WPI (Wholesale Price Index): Measures price changes at the wholesale level.

o CPI (Consumer Price Index): Measures price changes at the retail level.

• Types of Inflation:

o Demand Pull Inflation: Arises when aggregate demand exceeds aggregate supply.

o Supply Side Inflation/Cost Push Inflation: Occurs when a decrease in aggregate supply raises production costs.

o Headline Inflation: Total inflation, including volatile items like food and energy.

o Core Inflation: Excludes food and energy prices, capturing underlying inflation trends.

o Skewflation: Skewed rise in the price of some items while others remain unchanged.

o Stagflation: Rising prices with falling growth and employment.

• Inflation Targeting:

o Target Setting: Set every five years by the central government in consultation with RBI.

o Target Range: RBI aims to keep inflation between 2% (lower limit) and 6% (upper limit) of CPI.

• State-wise Inflation Analysis: Rural inflation > Urban inflation due to higher food prices.

o Highest Inflation: Kerala (7.3%), Chhattisgarh (4.9%).

o Lowest Inflation: Telangana (1.3%), Delhi (1.5%).