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Healthy data: March retail inflation down, February industrial output slightly lower (Roundup)

IANS  |  New Delhi 

Signs of a broad-based economic recovery and lower led Inc and to paint a "bright" outlook picture of the Indian economy, as eased India's March retail to 4.28 per cent, and factory production growth slowed somewhat in February to 7.1 per cent.

On Thursday, the data released by (CSO), revealed that March retail eased to 4.28 per cent from 4.44 per cent in February 2018. However, on a year-on-year (YoY) basis, the consumer price index (CPI) in March stood higher than the 3.89 per cent reported for March 2017.

The data pointed out that the (CFPI) stood at 2.81 per cent in March compared to 3.26 per cent in February 2018.

Product-wise, a rise in prices of vegetables, milk-based products, eggs, meat and fish pushed the retail higher on a YoY basis. Prices of vegetables in March were higher by a whopping 11.70 per cent, while those of milk-based products rose by 3.52 per cent.

In contrast, the category of "pulses and products" became cheaper by (-) 13.41 per cent and that of "sugar and confectionery" by (-) 1.61 per cent.

Among non-food categories, the "fuel and light" segment's rate accelerated to 5.73 per cent in March.

In terms of industrial production, the CSO data revealed that the Index of Industrial Production (IIP) marginally declined in February to 7.13 per cent from a rise of 7.39 per cent in January 2018 and a mere growth of 1.2 per cent in the corresponding period of last year.

As per the IIP data, the sequential slowdown in factory output was mainly on account of lower production in the sector.

On a YoY basis, the expanded by a healthy 8.7 per cent, while the sector's output dipped by (-) 0.3 per cent and the sub-index of increased by 4.5 per cent.

The data disclosed that among the six use-based classification groups, the output of primary goods which has the highest weightage of 34.04 grew by 3.7 per cent. The output of intermediate goods which has the second highest weightage rose by 3.3 per cent.

Similarly, consumer non-durables's output edged-higher. It rose by 7.4 per cent and that of consumer durables by 7.9 per cent.

In addition, infrastructure or construction goods' output increased by 12.6 per cent and that of capital goods by 20 per cent.

On its part, Inc lauded the continuing high single-digit recovery in industry as well as the slight fall in

Industry body Assocham's said: "Though a favourable base effect has helped the industrial growth numbers, other indicators like increase in demand for credit along with ability of the producers to raise prices of all point towards a confidence building macro picture."

"The retail at 4.28 per cent for March has the core element moving at a faster pace. Moreover with the touching a four year high, the numbers may make the RBI sit up and take a hard look at the interest rates trajectory. That is a worry, even as industrial sentiment looks up."

Anis Chakravarty, Lead and Partner, said: "We expect that expectations in the period ahead will possibly be shaped by oil price movement, impact of minimum support prices (MSP) inclusion, fiscal slippage as GST collections remain low, and monsoon forecasts."

Devendra Kumar Pant, Chief Economist, Ratings and Research said: "The February 2018 IIP growth at 7.1 per cent gives confidence that the industrial recovery is broadening."

"The broadening of the industrial recovery was supported by positive growth of all six use-based classification of the IIP for four consecutive months. Leading indicators from the IIP data - primary and intermediate goods - indicate that the recovery will strengthen in the coming months."

"It is after early FY17 that both investment and consumption sectors are part of the industrial recovery, which is also receiving support from infrastructure industries," Pant said.

--IANS

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, April 12 2018. 22:22 IST
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