Published: Tue, March 13, 2018
Markets | By Rosalie Gross

IIP at two-month high in January; February retail inflation eases

IIP at two-month high in January; February retail inflation eases

The Consumer Price Index inflation, which measures the change in retail prices, had fallen to 5.07% in January.

For fruits, it was 4.80 per cent against 6.24 per cent. Inflation for fuel and light category was at 6.80 per cent in February against 7.73 per cent in January.However, the rate of price increase was higher for transport and communication services at 2.39 per cent against 1.97 per cent in January.

India's consumer price index (CPI) or retail inflation stood at 4.44% in the month of February 2018, lower from 5.05% in January 2018, slightly in line with analysts expectations, however the numbers were higher compared to 3.65 in the corresponding month of the previous year.

"This (fall in CPI) should spur RBI to resume its rate easing cycle to give a boost to the nascent recovery now underway in the economy", Banerjee said.

India's retail inflation picked up in October to a seven-month high, driven by.

Riding on the back of robust manufacturing sector output, India's industrial production sustained the growth momentum to rise 7.5 percent in January, indicating early signs of industrial revival. The seasonal trend of rising food prices as the summer approaches, may prevent a further dip in food inflation in the ongoing month.

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Before this, factory output grew at a sharpest pace in November 2017 at 8.8 per cent.

Capital goods also registered a healthy growth at 14.6 per cent in January, 2018 against a decline of 0.6 per cent previous year.

The IIP growth in January this year was mainly on account of uptick in manufacturing sector, which constitutes of 77.63 per cent of the index. However, mining grew by a mere 0.1 per cent in the month.

Mining activity's growth further plummeted, growing 0.1 percent in January following December's trend at 1.2 percent, as compared with a robust growth of almost 8.6 percent a year ago.

As per use-based classification, the growth rates in January 2018 over January 2017 are 5.8 per cent in primary goods, 4.9 per cent in intermediate goods and 6.8 per cent in infrastructure/ construction goods. In January, retail prices of vegetables rose almost 30%. In all 16 out of 23 industry groups in the manufacturing sector showed growth in January. What is also noteworthy is the spike in consumer durables and non-durables demand.

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