NEW DELHI (TIP): Retail inflation inched up for the third successive month in October on the back of creeping prices of some food items, while industrial output growth slowed in September posing fresh challenges for policy makers trying to revive growth.
Data released by the Central Statistics Office (CSO) on Thursday showed the consumer price index rose an annual 5% in October compared to 4.41% in September. In rural areas retail inflation was 5.54% in October, while in urban segments it was 4.28%.
Prices of some food items such as pulses soared. The overall consumer food price index rose 5.25% in October compared with 3.88% in September. Price of pulses rose 42.2% in October, underscoring the need to tackle the problem through a medium-term strategy. The government has taken several steps, including a crackdown on hoarders, to ensure that the popular protein is available for the masses at affordable rates.
Economists said RBI is expected to keep a close watch on the inflation trajectory and may prefer to wait and watch for its next move on easing interest rates.
Separate data released by the CSO showed the index of industrial production rose an annual 3.6% in September, slobust expansion of 8.4% in September compared to a contraction of 11.1% in September 2014. Consumer non-durables fell 4.9% in September compared to 1.3% growth in the year earlier month, while consumer goods remained sluggish, rising 0.6% year-on-year in September compared to a contraction of 4% in September 2014. The faster-than-expected growth in August had triggered hopes a sharp rebound in the industrial sector. India Inc said it expects growth to gather momentum in the third quarter.
“Despite moderation in September industrial growth compared to the previous month, we expect a pick-up in the third quarter. Data indicates that demand for products such as passenger cars and two-wheelers has been strong in the run-up to the festive season,” said Chandrajit Banerjee, director-general at CII. Source TOI