Retail inflation hits 16-month high in January at 5.69%

Industrial output remains negative at 1.3%

Retail inflation hits 16-month high in  January at 5.69%

India’s retail inflation inched up in the new year while growth in industry production slumped second month in succession pointing to an uneven recovery in the economy.

Consumer price inflation printed 5.69 per cent in January, the industrial production declined at -1.3 per cent in December, the official data showed. Manufacturing sector and capital goods dragged industry output. Electricity generation too showed a decline. Mining was improved a bit but the growth in sector is not steady.

Industry expressed concerns on the IIP data, “negative growth in manufacturing and indifferent growth in mining have got wider implications and need to be addressed on priority basis," Assocham said.

Manufacturing is said to have impacted due to Chennai floods in October-November last year. The sector has highest weight in the index of industrial production. In December, manufacturing contracted 2.4 per cent. Power generation showed deceleration, recording a growth of 3.2 per cent as against 4.8 per cent growth in same month a year ago.

In the just-released estimates for economic growth for the current year, the government has estimated manufacturing to grow at 9.5 per cent. Analysts, however, have questioned the estimation based on the ground scenario.

In terms of industries, ten out of the twenty two industry groups in the manufacturing sector showed negative growth during December 2015 as compared to corresponding month of the previous year.

The consumer non-durable segment showed a contraction of 3.2 per cent in December as against a growth of 5.6 per cent in the corresponding month. In terms of industries, ten out of the twenty two industry groups in the manufacturing sector showed negative growth during December 2015 as compared to corresponding month of the previous year.
Consumer price inflation, although a 17-month high, remained within Reserve Bank of India’s comfort zone. Food inflation, especially prices of pulses have been causing an acceleration in CPI month over month, the data showed. Retail food prices were up 6.85 per cent in January.


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