Published: Fri, October 13, 2017
Markets | By Rosalie Gross

India's factory output grows sharply at 4.3% in August

India's factory output grows sharply at 4.3% in August

The Consumer Price Index (CPI) or retail inflation stood at 4.39 per cent in September 2016.

Mumbai: The factory output growth in August surged to 9-month high of 4.2%, indicating an acceleration of industrial activities after the initial setback due to GST-related destocking much to the delight of the government which is facing criticism over poor handling of the economy.

The Reserve Bank of India (RBI) while keeping the policy rates unchanged in its latest monetary policy review last week, marginally increased the inflation outlook to 4.2-4.6% for the second half (October-March) of the financial year.

Factory output measured by the index of industrial production (IIP) is the closest approximation for measuring economic activity in the country's business landscape.

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In terms of industries, ten out of the twenty three industry groups (as per 2-digit NIC-2008) in the manufacturing sector have shown positive growth during the month of August 2017 as compared to the corresponding month of the previous year. This was higher than the 4 per cent growth recorded in same month last fiscal.

The July IIP growth has been revised to 0.9 per cent from 1.2 per cent. "A rate cut of 25 bps can be expected in Q4 provided inflation remains below 4%".

Mumbai: Consumer inflation edged lower to 3.28 per cent for the month of September, driven by housing and fuel prices. "However, 13 of the 23 sub-sectors of manufacturing with a weight of 27% in the IIP, recorded a contraction in August 2017".

India's annual retail inflation remained static in September with a marginal drop in the food prices, official data showed on Thursday.

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