Retail inflation rises to 15-month high in November, industrial production slows

Retail inflation rises to 15-month high in November, industrial production slows

A sharp rise in food and fuel prices led India's retail price inflation in November to rise a 15- month high of 4.88% and virtually tied RBI's hands for any interest rate cut in the near future as experts saw price rise to be more severe in coming quarters.

Food prices rose 4.42% in November from 1.90% in the previous month on the back of shooting vegetable rates while fuel prices jumped 7.92% from a low of 6.36% in October due to rising global crude prices.

The industrial production data, which was also released simultaneously, disappointed with a 2.2% print in October from a high of 2.88% in the previous month.

The consumer price inflation, which directly affects the common man, has been on the rise since August after cooling at 2.36% in July. Food and fuel inflation have been the main drivers couple with the rise in HRA allowance by Centre and states.

The rise in CPI had prompted the Reserve Bank of India to increase its baseline projection of retail inflation to upto 4.7% in the medium term from the earlier 4%.

Price rise in vegetables was 22.48% in November rising from 7.47% in the previous month. Inflation in protein rich eggs shot to 7.95% as against 0.69% in the previous month.

In the fuel and light segment, it was 7.92 per cent, as against 6.36 in October.

The Central Statistics Office (CSO) said the slowdown in factory output was mainly on account of deceleration in manufacturing and mining outputs.

"The general index for the month of October 2017 stands at 123, which is 2.2% higher as compared to the level in the month of October 2016. The cumulative growth for the period April-October 2017 over the corresponding period of the previous year stands at 2.5%," the official data said.

Economists ruled out any rate cut by the RBI in 2018 as they saw the retail inflation going up until June 2018 before it again started cooling from July.

Analysts also did not see much improvement in industrial output numbers in November as there was no significant push in private sector investment.

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