India's factory production in January up 7.5% over previous year

India's factory production in January up 7.5% over previous year

"Further, adverse base effect will move inflation to its peak of around 5.5-6.0 percent before gliding towards 4.5 percent by March 2019".

India's measure of consumer price inflation on an annual basis, the consumer price index (CPI), eased to 4.44% in February, data released by the ministry of statistics showed on Monday.

The central bank expects retail inflation to pick up to 5.1% to 5.6% in April-September before easing, assuming normal rainfall.

While the price rise in food segment was 3.26% in February, it was 17.57% in vegetables.

Cumulative IIP growth for the period of April-January over the corresponding period of the previous year stands at 4.1 percent.

"The eventual rabi harvest, distribution of the 2018 monsoon and the operationalization of the proposals made in the Union Budget for FY19, including the launch of Operation Greens and the augmentation of minimum support prices, would impact the trajectory of food inflation going forward", she added.

India's slowing inflation a temporary reprieve for Asia's worst bond market
India's factory production in January up 7.5% over previous year

Manufacturing sector, which accounts for more than three-fourths of the entire index soared 8.7 percent in January as compared with 8.5 percent in December, led by an improved production of consumer durables and continued double-digit growth of consumer non-durables as well as capital goods.

Experts suggest the consistent growth in the industrial production could boost the overall economic growth in the fourth quarter.

The retail inflation, however, fell to four-month low of 4.44 per cent in the month of February as compared to 5.07 per cent in January.

Capital goods, a barometer of investments, showed a sharp increase in output by 14.6% in January, 2018 as against a decline of 0.6% year ago. "This is the third consecutive month in which factory output has clocked a high single digit growth". Moreover, the manufacturing which has a weight of 77.63 per cent in the IIP is showing the sustenance of the growth momentum.

As per use-based classification, the growth rates in January 2018 over January 2017 are 5.8% in primary goods, 4.9% in intermediate goods and 6.8% in Infrastructure/ Construction Goods. "Mining sector is a dampener in IIP data and may be cause of concern from mining related industries", Devendra Kumar Pant, chief economist, India Ratings and Research said.

Mining activity's growth further plummeted, growing 0.1 percent in January following December's trend at 1.2 percent, as compared with a robust growth of almost 8.6 percent a year ago.

Related Articles