New Delhi, Sept 12: India’s consumer price inflation rose more than expected to a five-month high in August, fuelled by strong gains in prices of food items. It has dampened the chances of a rate cut by the Reserve Bank of India (RBI) in the policy review scheduled for October amid weak economic growth.
India’s consumer price index (CPI) rose 3.36 per cent in August from a year earlier, data released by the Ministry of Statistics Tuesday showed.
Inflation had eased to 1.46 per cent in June — its slowest pace since India started releasing retail inflation figures in January 2012, based on combined data for rural and urban consumers.
Separately, annual industrial output grew at 1.2 percent in July, the data showed. Industrial output contracted 0.2 percent in June. The economy also slowed to a three-year low in the three months to June.
India’s foodgrain production is expected to fall this year following a decline in areas under plantation, as a resulg of unfavourable weather in some states. Seasonal monsoon rains have caused damage to some crops and hit movement of goods.
“Looking ahead, price pressures are set to rise further,” said Shilan Shah, an economist at Capital Economics in Singapore.
Retail food inflation, which accounts for about 54 per cent of the consumer price index, rose 1.52 percent in August after prices contracted in the previous three months.
# Consumer price index rose from 2.36 per cent in July to 3.36 per cent in August
# CPI August 2016 was 5.05 per cent
# CPI YoY in urban areas 3.35 per cent, rural 3.30 per cent.
# Consumer Food Price Index by 1.52 per cent from July.
# Retail inflation rose on rise in prices of food items such as vegetables, cereals, milk-based products, meat and fish.
# Items-wise increase in food prices for August: Vegetables (6.16 per cent); cereals (3.87 per cent); milk-based products (3.58 per cent) and meat and fish (2.94 per cent); food and beverages (1.96 per cent).
# Fuel and light price inflation in August: 4.94 per cent.
July factory output rises marginally
Indo-Asian News Service
New Delhi, Sep 12: Shrugging off the contraction experienced in the previous month, Indian factory output in July rose marginally by 1.2 per cent as compared to the same month of last year, official data showed Tuesday.
As per the new Index of Industrial Production (IIP), with the revised base year of 2011-12, factory output had declined by (-)0.1 per cent during June due to a drop in manufacturing, from a rise of 2.80 per cent reported for May this year.
The factory output had expanded by 4.5 per cent during July of 2016. On a year-to-date basis, the output rose by 1.7 per cent during April-July, 2017, which was much lower than the IIP growth rate of 6.5 per cent recorded in the corresponding period of last year.
Data released by the Central Statistics Office (CSO) showed that July’s modest turnaround was mostly led by a revival in electricity, which grew at 6.5 per cent over the same month last year, and in “Other manufacturing” that grew at an impressive 20.9 per cent year-on-year.
Manufacturing output, which has the maximum weightage in the overall index, inched up at a marginal 0.1 per cent in July. The mining output during the month in consideration rose 4.8 per cent
Among the six use-based classification groups, the output of primary goods grew by 2.3 per cent, consumer non-durables by 3.4 per cent and infrastructure or construction goods by 3.7 per cent.
In contrast, the output of intermediate goods declined by 1.8 per cent, consumer durables by 1.3 per cent and capital goods by 1 per cent.
“In terms of industries, eight out of the 23 industry groups in the manufacturing sector have shown positive growth during the month of July 2017 as compared to the corresponding month of the previous year,” the CSO said.
“The industry group ‘Other manufacturing’ has shown the highest positive growth of 20.9 per cent, followed by 18.9 per cent in ‘Manufacture of pharmaceuticals, medicinal chemical and botanical products’… on the other hand, the industry group ‘Manufacture of tobacco products’ has shown the highest negative growth of 43.4 per cent,” it added.