Published: Wed, September 13, 2017
Business | By Max Garcia

Retail inflation rises to 3.36% in August, industrial production increases in July

Retail inflation rises to 3.36% in August, industrial production increases in July

Analysts polled by Reuters had expected CPI inflation would edge up to 3.20 percent, compared with 2.36 percent in July.

India's Consumer Price Inflation rose to 3.36% in August, as against 2.36% in July 2017, data released by the Central Statistics Office showed on Tuesday.

In July, the inflation rate had shot up for the first time in three months, when it rose by 2.36 per cent. On the flip side, though the Index of Industrial Production (IIP) rebounded to a growth of 1.2% in July, there are concerns over the slow-paced growth and stagnant manufacturing volumes despite restocking of inventories in the GST regime.

The output rose by 1.2 per cent as compared to the same month of past year. Industrial output contracted 0.2 percent in June. But rising price pressures will complicate the RBI's policy path as the latest data for April-June quarter showed economic growth cooled to a three-year low as the GDP for the quarter stood at 5.7 per cent.

In contrast, the output of intermediate goods declined by (-) 1.8 per cent, consumer durables by (-) 1.3 per cent and capital goods by (-) 1 per cent. Food inflation has turned positive.

Vegetable prices witnessed an increase of 6.16 per cent in August against a 3.57 per cent fall in July, while the price of pulses continued to drop by 24.43 per cent in August against a 24.75 fall witnessed in July.

The CPI had risen by 5.05 per cent for the month of August, a year ago.

The rate however is still below/above the Reserve Bank of India's (RBI) medium-term target of 4 per cent. "Instead it's a clear signal that the slowdown has become more acute".

"As the consumption demand rises during festive season and investment too due to government measures taken in the last few months, we can expect growth to pick up in coming months", Baru added.

Like this: