- A low base pushed factory output to a 14-month high of 10.3 percent in August, data released by the Ministry of Statistics and Programme Implementation showed.
- Mining grew by 12.3 percent, manufacturing expanded by 9.3 percent, and power, 15.3 percent.
- Retail inflation fell to a three-month low of 5.02 percent in September.
- Finance minister Nirmala Sitharaman, however, warned that global uncertainties combined with dome.
- Retail inflation, which is based on the cost price index (CPI), has stepped inside the Reserve Bank’s threshold of below 6 percent after a gap of two months.
- However, price pressures remained in the food segment outside of vegetables.
A low base pushed factory output to a 14-month high of 10.3 percent in August, data released by the Ministry of Statistics and Programme Implementation showed. The index of industrial production was 0.7 in August 2022.
“IIP growth at 10.3 percent is overstated due to the base effect (-0.7 percent last year) and hence should be viewed against this backdrop. We need to see if such buoyancy gets reflected in the sales of India Inc. in their Q2 results,” Madan Sabnavis, chief economist, of Bank of Baroda, said.
Mining grew by 12.3 percent, manufacturing expanded by 9.3 percent, and power, by 15.3 percent. Based on the end use of products, the output of capital goods grew 12.6 percent. Consumer durables output rose 5.7 percent and consumer non-durables output grew 9.0 percent.
Retail inflation dropped to a three-month low of 5.02 percent in September because of the easing of food prices. Finance Minister Nirmala Sitharaman, however, warned that global uncertainties combined with domestic disruptions may keep inflationary pressures elevated in the coming months.
Retail inflation, which is based on the cost price index (CPI), has stepped inside the Reserve Bank’s threshold of below 6 percent after a gap of two months. Core CPI inflation moderated to 4.5 percent in September from 4.8 percent in August, economists said. Inflation was at 6.83 percent in August and 7.41 percent in September 2022.
“While domestic consumption and investment demand are expected to continue to drive growth, global and regional uncertainties and domestic disruptions may keep inflationary pressures elevated in the coming months, warranting greater vigilance by the government and the RBI,” Sitharaman said. She said the government has already taken pre-emptive measures to contain food inflation, which is likely to subside price pressures.
According to the data released by the National Statistical Office (NSO), inflation in the food basket came down to 6.56 percent in September from 9.94 percent in the preceding month, pulled down by the sharp fall in tomato prices that had propelled headline retail inflation to 7.44 percent in July, the highest in 15 months.
“The upward pressure persists in other food items with 50 percent of the food and beverages sub-components by weight, seeing 6 percent-plus inflation in September,” Gaura Sen Gupta, India Economist at IDFC First Bank, said. “The uneven monsoon, lag in sowing of crucial kharif crops such as pulses and oilseeds, and modest reservoir levels do not augur well for the outlook for food inflation,” Aditi Nayar, Icra’s chief economist said.
(With inputs from agencies)
