Retail inflation cools, factory output soars
NEW DELHI : India’s economy received a dual boost as retail inflation cooled in September, retreating within the central bank’s comfort zone. Simultaneously, factory output surged into double-digit growth territory in August, scaling a 14-month high, indicating an upswing in economic momentum. Consumer Price Index (CPI)-based inflation eased for the second consecutive month in September to 5.02%, aided by a slower rise in vegetable prices, official data showed on Thursday.
Separately, data from the statistics ministry showed factory output grew 10.3% in August, though in part, influenced by a statistical effect. Cooling inflation and a pick-up in factory output, especially in capital goods, regarded as a proxy for investments in the economy, is welcome news for policymakers and companies that are grappling with high borrowing costs and a slump in export markets. Retail inflation moderated from 6.83% in August and a 15-month high of 7.44% in July, meeting the Reserve Bank of India’s (RBI) target range of 4-6% during September.
A Mint poll of 18 economists estimated retail inflation to slow to 5.4% in September. Food inflation, measured by the Consumer Food Price Index, which accounts for nearly half of the overall consumer price basket, slowed to 6.56% in September, from 9.94% in August and from 11.51% in July, according to data released by the ministry of statistics and programme implementation (MoSPI) on Thursday. A moderation across the food and core categories helped bring the overall inflation down during September, said Madan Sabnavis, chief economist at Bank of Baroda.
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