Retail inflation accelerates, industrial growth slows

Tuesday,   12-Dec-2017   05:38 PM (IST)

India suffered a macroeconomic setback on Tuesday with retail inflation unexpectedly accelerating to a 15-month high of 4.88% in November and industrial production slowing to 2.2% in October.Retail inflation, which rose 3.58% in October, quickened the month after mainly on account of rising fuel and food prices. While fuel price inflation accelerated to 7.9%, food price inflation was up 4.4% in November.Separate data released by the government showed that India’s factory output, measured by the Index of Industrial Production (IIP), slowed in October from an upwardly revised 4.14% in September.While inflation data revealed the growing downside risk of rising crude oil prices, the deceleration in factory output suggests the turnaround in investment and demand is yet to resume in earnest.While mining output was stagnant in October, manufacturing and electricity grew at 2.47% and 3.2%, respectively. Capital goods production, which indicates investment demand in the economy, grew for a third consecutive month in October, by 6.8%. However, consumer durable goods contracted for the second consecutive month at 6.9%.