IIP growth subdued, CPI hits 22-mth high at 5.77% in Jun

Showing feeble signs of recovery, industrial production grew by 1.2 per cent in May, but retail inflation touched a 22-month high of 5.77 per cent in June, squeezing headroom for a rate cut by Reserve Bank.
Industrial production rebounded from a contraction of 1.35 per cent in the previous month, but growth was subdued at 1.2 per cent in May and mainly due to some uptick in consumer durables output and manufacturing activity.
Factory output, measured in terms of the Index of Industrial Production (IIP), had expanded by 2.5 per cent in May last year.
However, on cumulative basis, factory output in April-May contracted 0.1 per cent compared with 2.8 per cent growth in the year-ago period, the data released by the Central Statistics Office (CSO) showed today.

The retail inflation measured on the Consumer Price Index (CPI) was marginally lower at 5.76 per cent in May, while it was 5.40 per cent in June last year.
In August 2014, consumer inflation was at 7.8 per cent.

Overall food inflation moved up to 7.79 per cent in June from 7.47 per cent in the previous month.
Inflation in vegetables was up at 14.74 per cent as against 10.77 per cent in May and in cereals and related products it was 3.07 per cent compared to 2.59 per cent in the previous month.
With inflation remaining at an elevated level and above the 5 per cent-mark, RBI's next monetary policy review on August 9, would be keenly watched as inflation targetting has been the main objective of the apex bank.

"The growth in manufacturing remains subdued and is a cause for concern. Weak consumer and investment demand points to the fact that recovery is going to be slow in manufacturing and the need for addressing more deep rooted structural issues," said FICCI Secretary General A Didar Singh.
During the April-November period, the manufacturing
sector recorded a contraction of 0.3 per cent compared to a growth of 3.9 per cent.
Similarly, electricity generation grew at 8.9 per cent in November compared to just 0.7 per cent a year ago. Mining output grew 3.9 per cent in November compared to 1.7 per cent same month a year ago.

Capital goods production increased by 15 per cent in November compared to a decline in production by 24.4 per cent earlier.
As per use-based classification, growth rates in November 2016 over November 2015 are 4.7 per cent in basic goods and 2.7 per cent in intermediate goods.
Consumer durables and consumer non-durables recorded growth of 9.8 per cent and 2.9 per cent respectively, with the overall growth in consumer goods being 5.6 per cent.
In terms of industries, 16 out of 22 industry groups in the manufacturing sector have shown growth during the month of November 2016 as compared to the corresponding month of the previous year.

According to Consumer Price Index data for December, the decline in retail inflation was on account of falling prices of vegetables and pulses. This is the lowest level at least since January 2014.
The Consumer Price Index (CPI)-based inflation stood at 3.63 per cent in November 2016, as per the data released by the Ministry of Statistics and Programme Implementation.
A year ago, in December 2015, retail inflation was at 5.61 per cent.
Inflation in vegetables category slipped further in the negative territory to (-)14.59 per cent, as against 10.29 per cent in November.
Likewise, prices of pulses and products also slipped further in negative territory at (-)1.57 in December.

However, inflation in fruits came in at 4.74 per cent, slightly up from November's 4.60 per cent. Cereals and products at 5.25 per cent too showed a rise in inflation print during the month against 4.86 per cent in November.
Protein items meat and fish had inflation print of 4.79 per cent in December, as against 5.83 per cent in November. Egg prices witnessed 6.41 per cent rise, as against 8.55 per cent in the previous month.
Overall, the Consumer Food Price Index was down at 1.37 per cent in December compared with 2.11 per cent in November.
The CPI-based inflation in fuel and light segment was at 3.77 per cent in December as against 2.80 per cent a month ago.

Rural retail inflation stood at 3.83 per cent in December compared with 4.13 per cent in November. For urban sector, it was recorded at 2.90 per cent as against 3.05 per cent in the previous month.