NEW DELHI: Retail inflation inched up marginally in October led by fuel, light and some food prices, while industrial output growth slowed to a seven-month low in September as the base effect waned and economists said the data provided space to the Reserve Bank of India(RBI) to continue with its easy interest rate policy for now.
Data released by the National Statistical Office(NSO) on Friday showed inflation, as measured by the consumer price index (CPI), rose an annual 4.5%, slightly higher than the 4.4% in the previous month and below the 7.6% recorded in October 2020. Urban inflation was at 5% while rural inflation slowed to a 10-month low of 4.1%.
Core inflation (which is minus food and fuel) remained sticky at 6.1% in October, above the 5.9% in the previous month. Prices of vegetables fell 19.4% during the month while oils and fats rose 33.5% during the month.
“Measures such as cut in excise duty on fuel, imposition of stock limits and waiver of basic import duty on edible oils are expected to restrict domestic inflation despite soaring prices of fuel and edible oils in the global markets. The inflation in the services sector is likely to remain elevated as momentum in vaccination continues and mobility rebounds to the pre-pandemic level,” Care Ratings said in a note.
Separate data released by the NSO showed the index of industrial production (IIP)) rose an annual 3.1% in September, lower than the 11.9% in the previous month and above the 1% recorded in September 2020. The manufacturing sector grew 2.7% in September compared to 0.4% in the year earlier month while mining grew 8.6%. The electricity sector rose 0.9% in September, lower than the 4.9% recorded in September 2020. The capital goods sector, seen as a barometer of industrial activity, rose 1.3% compared to a contraction of 1.2% in the year earlier month.
“India’s IIP growth slipped to a 7-month low of 3.1% in September 21 with an adverse base and sequential contraction in activity both at play. The month was a testimony to supply side disruptions weighing on production, with the downside thankfully getting capped by ahead of festive season led ramp up in consumer durables sector,” according research firm
Source:thetimesofindia.com