Retail inflation falls Feb, industrial output increases in Jan

Jeannie Matthews
March 12, 2018

In January, the index expanded by 4 percentage points from 7.1 per cent in December.

Electricity also saw growth accelerating to 7.6% from 4.43% in December.

Besides, he said, even though the consumer inflation at 4.4 percent in February may be lower, the undercurrent remains biased on the upside, "making RBI disinclined towards any rate cut, though the industry would like it to happen".

RBI had left policy rates unchanged fearing a rise in inflation and had projected Q4FY2018 inflation at 5.1%, including the impact of HRA, considering the rise in fuel prices in January 2018, and less-than-usual moderation in seasonal food prices.

India's consumer price index (CPI) or retail inflation stood at 4.44% in the month of February 2018, lower from 5.05% in January 2018, slightly in line with analysts expectations, however the numbers were higher compared to 3.65 in the corresponding month of the previous year.

The country's industrial production, however, rose by 7.5% in January, backed by growth in manufacturing, consumer and capital goods sectors.

In January, apparel played a major role in boosting inflation, with the biggest rise in prices in about 28 years.

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The Reserve Bank of India (RBI), which takes into consideration the inflation indicator for deriving it's position on India's monetary policy stance, had increased the CPI target for Q4FY18.

The CPI inflation for rural areas was 4.37% in February while for urban areas it was 4.52%.

Inflation softened last month mainly on account of cheaper food prices and lower cost for fuel.

The mining sector, however, was a laggard at 0.1% growth compared to 8.6% a year ago.

As per use-based classification, the growth rates in January 2018 over January 2017 are 5.8 percent in primary goods, 14.6 percent in capital goods, 4.9 percent in intermediate goods and 6.8 percent in infrastructure/construction goods.

Inflation in the food and beverages segment slowed to 3.38% in February from 4.58% in the previous month.

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