Industrial output recovers by a small 1%, retail inflation at 16-month low

Experts say MPC may continue with accommodative stance in next nine months

The growth-inflation dynamics seem to be improving for the economy, with industrial output posting mild expansion in December and the retail price inflation rate declining to a 16-month low in January. However, economists believe that growth is still weak and non-food articles like fuel continue to face inflationary pressures, which may force the Reserve Bank of India (RBI) to remain “accommodative”.

The Index of Industrial Production (IIP) grew by 1 per cent in December on a year-on-year (YoY) basis compared with a 2 per cent decline in the previous month, the data released by the National Statistical Office showed. On the