High food prices push retail inflation to 5-month high of 7.41% in Sept

IIP shrinks 0.8% in Aug - a first in 17 months

In a double whammy for the Indian economy, the retail inflation rate shot up to a five-month high in September, while factory output contracted after a gap of 17 months in August. This could force the Reserve Bank of India (RBI) to hike the repo rate yet again in December.

Data released by the National Statistical Office showed that consumer price index (CPI)-based inflation accelerated to 7.41 per cent in September from 7 per cent in the previous month, driven by a 22-month high food inflation rate of 8.6 per cent.

Meanwhile, the index of industrial production (IIP) shrank 0.8 per cent