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  1. Double trouble for economy? Inflation rises, factory output slows; check September CPI, August IIP details

Double trouble for economy? Inflation rises, factory output slows; check September CPI, August IIP details

The September CPI Inflation rose, albeit moderately, to 3.77% from 3.69% in the previous month.

By: | Updated: October 12, 2018 6:12 PM
The September CPI Inflation rose, albeit moderately, to 3.77% from 3.69% in the previous month. The September CPI Inflation rose, albeit moderately, to 3.77% from 3.69% in the previous month.

As the monthly CPI and IIP data were released, they showed signs of double trouble, with inflation rising and factory output slowing. The September CPI Inflation rose, albeit moderately, to 3.77% from 3.69% in the previous month. Although, inflation is still within the 4% range of the Reserve Bank of India (RBI).

Meanwhile, the IIP data showed that the factory output in the month of August slowed down to a three-month low, sharply, to 4.3% from 6.6% reported in July. However, sixteen out of the twenty three industry groups in the manufacturing sector have shown positive growth during the month of August 2018 as compared to the corresponding month of the previous year, the government said in the statement.

 

September CPI Inflation

The September CPI Inflation continued with negative inflation for vegetables. Data showed that CPI vegetable inflation was -4.15% in September, while CPI food price inflation was 0.51%. “The mild uptick in the CPI inflation in September 2018 is in line with our expectation of a sub-4% print for that month,” Aditi Nayar, Principal Economist, ICRA said.

“However, the rise in crude oil prices, the sharp weakening of the INR, and the revision in MSPs are likely to push up the headline inflation above 4% in the ongoing quarter,” she added.

August IIP

 

The mining sector production contracted by 0.4% in August compared to a growth of 9.3 per cent in the year-ago month, while capital goods output growth decelerated to 5% from a 7.3% expansion year ago.

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