Industrial output touches 3-month high at 2.5% in Sept

India’s industrial production picked up an unexpected 2.5 per cent and retail inflation cooled at a record low of 5.52 per cent helped by sharp drop in food and oil prices, indicating that the decade-long slowing economy is showing signs of revival.

The official data showed that  the October consumer price inflation grew at its slowest pace since the retail inflation numbers were first published in January 2012.

Analysts said that the consistent downward trend in inflation will make RBI’s aim to bring down inflation to 8 per cent by January 2015 attainable.

According to another government data, the September industrial production growth at 2.5 per cent  was sharpest in the past three months on the back of a handsome 11.6 per cent growth in capital goods sector, a barometer of demand in the economy.

“A robust growth in capital goods sector indicates some pickup in investment as companies are contemplating expansion as business environment has turned positive. However, consumer durables are still in the red as high interest rates has stymied demand,” Industry body CII said in a statement.

The consumer durables and non-durables production remained in the negative territory in September. Mining sector output too grew at a slow 0.7 per cent.

“Fall in consumer goods growth is disturbing and we urge the government to take steps to arrest this fall. Faster implementation of large projects and improvement in business regulatory environment are required to have a sustainable growth in industry in the long-run,” Ficci said.

India Inc also welcomed the drop in retail inflation and  hoped it would propel RBI to reduce policy rates.