Retail inflation up for first time in 4 months, factory output slows; Will RBI cut rates?

By: | Published: March 12, 2019 6:10 PM

Even as retail inflation rose for the first time in 4 months as the fall in prices of food moderated, official data showed.

Retail inflation rises to 2.57 pc in Feb, against 1.97 pc in Jan: Govt dataIndustrial output growth as measured in terms of the Index of Industrial Production (IIP) stood at 1.7 per cent in January.

Even as retail inflation rose for the first time in 4 months as the fall in prices of food moderated, official data showed. CPI inflation stood at 2.57 percent in February compared to a revised 1.97 percent in January 2019, according to the data released by the Central Statistics Office (CSO). Analysts polled by Reuters had forecast February’s annual increase in the consumer price index at 2.43 percent.

Industrial output growth as measured in terms of the Index of Industrial Production (IIP) stood at 1.7 per cent in January as growth in the manufacturing sector slowed. In January 2018, it had grown by 7.5 per cent.

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A Reuters poll of economists had predicted a growth of 2 per cent for January. The industrial output had grown at 4.4 per cent during April-January 2018-19 compared to 4.1 per cent in the same period last  fiscal.

“Inflation reading for February is marginally higher than market expectations but it still remains within the target range of the RBI. This should still be counted as a comfortable reading and is likely to keep the room open for the central bank to cut the policy rate one more time this year”, said Tushar Arora, Senior Economist, HDFC Bank told Reuters.

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