OK contrast

• Contrast between India’s real economy and financial markets, showing both concern and relief.
• February’s 3.61% retail inflation is a seven-month low, aided by a steady fall in food inflation.
• Food inflation, a barometer of people’s spending on groceries, fell to an almost two-year low of 3.75%.
• February’s retail inflation is within the Reserve Bank of India’s (RBI) medium-term 4% inflation target, signaling a repo rate cut.
• RBI’s February 7 0.25 basis point repo rate cut signaled the central bank’s intent to raise capital flows in the real economy.
• January’s industrial production print at an eight-month high of 5%, up from December’s 3.55%, indicates resilience in the real economy.
• February equity mutual funds (MF) reporting numbers plunged 27% due to declining stock returns.
• Despite temporary financial market volatility, the real economy’s buoyancy makes the hit bearable.