India’s October retail inflation went down to 3.31 percent, while industrial output growth slipped to 4.5 percent in September from a rise of 4.66 percent in August, official data showed on Monday.
As per the data released by the Central Statistics Office (CSO), the Consumer Price Index (CPI) eased to 3.31 percent from a rise of 3.70 percent in September.
The slow down in CPI was attributed to lower food prices, as the Consumer Food Price Index (CFPI) deflated (-) 0.86 percent in October from an expansion of 0.51 percent in September 2018.
On a year-on-year (YoY) basis, the retail inflation in October 2018 was lower than in the corresponding period of last year. It had stood at 3.58 percent in October 2017.
Category-wise, prices of milk-based products, eggs, meat and fish pushed the retail inflation higher on a YoY basis.
In contrast, deflation in the cost of vegetables, pulses and sugar capped the overall food prices.
Among non-food categories, the ‘fuel and light’ segment’s inflation rate accelerated to 8.55 percent in October.
On the other hand, India’s industrial output growth slipped to 4.5 percent in September from a rise of 4.66 percent in August.
The data released by the Ministry of Statistics and Programme Implementation showed that the Index of Industrial Production (IIP) in September 2017 had grown at a slower rate of 4.1 percent.
“The cumulative growth for the period April-September 2018 over the corresponding period of the previous year stands at 5.1 percent,” the ‘Quick Estimates’ of IIP released by the ministry said.
On the YoY basis, the output of manufacturing sector expanded by 4.6 percent, while mining production inched up by 0.2 percent and the sub-index of electricity generation increased by 8.2 percent.
Among the six use-based classification groups, the output of primary goods which has the highest weightage of 34.04 grew by 2.6 percent. The output of intermediate goods, which has the second highest weightage, inched up by 1.4 percent.
Similarly, consumer non-durables output rose during the month by 6.1 percent and that of consumer durables by 5.2 percent.
In addition, infrastructure or construction goods output increased by 9.5 percent and capital goods by 5.8 percent.
Reacting to the IIP numbers, industry body Assocham said that the latest estimates gave an optimistic outlook for the economy.
“The index of industrial production accelerated in September, 2018, mainly pulled up by strong performance in manufacturing, electricity, infrastructure or construction and consumer durable goods,” the industry body said in a statement.
According to Rajeev Talwar, President, PHD Chamber of Commerce and Industry, benign inflation conditions and strong footing in the industrial development are expected to boost the sentiments of investors.
“We expect the IIP numbers to improve for the month of October 2018 vis-à-vis festive demand,” Talwar was quoted as saying in a statement.
India Ratings and Research’s (Ind-Ra) Chief Economist Devendra Kumar Pant said that while low headline inflation will provide some comfort to RBI in its forthcoming monetary policy committee (MPC) meeting, a sticky core-core inflation, which has remained in excess of 5.30 percent since November 2017 will make RBI’s job difficult.
“Ind-Ra believes, the RBI may remain in pause mode in its forthcoming MPC meeting in view of conflicting trends of different segments of CPI,” Pant said in a statement.
“Any rate hike from now till end of FY19 will be more data dependent and will be governed especially by the movement of crude oil prices, which has softened recently.”