India's factory output growth flat, retail inflation up

India-rural-inflation The annual food inflation rose sharply to 6.32 per cent from 5.21 per cent

India's factory output growth turned flat in March after rising during the month before, even as the annual retail inflation for April rose to 5.39 per cent from 4.83 per cent in March, official data showed on Thursday.

The factory output for February, based on the index of industrial production (IIP), which had turned positive at 2 per cent, after two straight months of decline, rose negligibly by 0.1 per cent in March, as per data released by the Central Statistics Office.

As for annual retail inflation, based on consumer price index (CPI), the rise came after two straight months of decline. The inflation rates for the preceding three months were 4.83 per cent for March, 5.26 per cent for February and 5.69 per cent for January.

At the same time, the annual food inflation rose sharply to 6.32 per cent from 5.21 per cent. This apart, the annual retail inflation in the rural economy was relatively higher at 6.09 per cent, against 4.68 per cent in the urban areas.

Worryingly for industry, the index for manufacturing, which has the maximum weight in the overall IIP, actually fell by 1.2 per cent in the month under review. While the index for mining also fell, albeit marginally by 0.1 per cent, that for electricity grew by a robust 11.3 per cent.

Around the same time last month, there was much to cheer as official data forecast the rains during the upcoming monsoon season to be above normal, and that retail inflation fell to a six-month low while factory output rose after three months of decline.

The IIP data revealed that among the six use-based classifications of the index, the output of consumer durables segment expanded by 8.7 per cent in March, whereas the consumer non-durables segment reported a negative growth of 4.4 per cent.

The total consumer goods segment was marginally up by 0.4 per cent.

However, capital goods segment, which is a key indicator of economic activity plunged by minus 15.4 per cent.

The basic and intermediate goods' output inched-up by 4.00 per cent and 3.7 per cent, respectively.

Overall, only 12 out of the 22 industry groups in the manufacturing sector have shown positive growth during the month under review.

The retail inflation was mainly driven up by higher food costs in April. The inflation in food and beverages during the month under review rose by 6.21 per cent.

The official data showed that prices of pulses were up 34.13 per cent over those prevailing during the past year. Cost of sugar and confectionery edged-up by 11.18 per cent on a year-on-year (YoY) basis.

Prices of spices were up by 9.80 per cent. Protein based food items like meat and fish became expensive by 8.07 per cent. Eggs' cost rose by 6.64 per cent.

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Topics : #Inflation | #business

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