September IIP slumps to 3.6%, October CPI rises to 5%

Pulses recorded a 33.25% inflation and there has been a slower expansion in the mining sector

The annual industrial output grew at a slower-than-expected pace of 3.6% in September, dampened by a slower expansion in the mining sector, government data showed on Thursday.

IIP was revised to 6.3% in August.

Also, the retail inflation climbed to a four-month high in October as food prices escalated on supply deficiency in pulses.

Consumer price index based inflation, the primary gauge of central bank, rose to 5% in October versus 4.41% in the previous month, data released by the central statistics office showed on Thursday. However it was more favourable than RBI’s comfort zone of 6% by January 2016. RBI cut repo rate for the fourth time this year in September, leaving repo rate at 6.75%.  

With the inflation trajectory on an upside, the September was probably the last interest rates cut by the central bank for the fiscal.

The retail food inflation shot up to 5.25% in October versus 3.88% in August mainly on account of supply shortage in pulses.

Food & beverage inflation in October was up at 5.36%.

Pulses recorded a 33.25% inflation. The government on Thursday offloaded over 4,660 tonnes of seized pulses in the market to check prices and boost availability.

The domestic demand in the economy has failed to pick up despite easing of interest rates by the central bank, which has in turn led to a cut in lending rates by banks and eased EMI pressure to an extent.

Clothing and footwear inflation eased to  5.62% from  6% in September.

The fuel inflation eased marginally to 5.32% in October versus 5.42% in the previous month.

CPI index underwent a base year revision from 2010 to 2012 in February.