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Home / Business / Retail inflation dips, factory output ambles

Retail inflation dips, factory output ambles

Vegetables, pulses and sugar cheaper; poor show by mining sector and lower offtake of capital goods
Retail inflation is the lowest since September 2017 when it touched 3.28 per cent
Retail inflation is the lowest since September 2017 when it touched 3.28 per cent
(Shutterstock)

Our Special Correspondent   |   New Delhi   |   Published 12.11.18, 08:15 PM

Vegetable prices declined 8.06 per cent in October against a 4.15 per cent contraction in September. Inflation also slowed to 0.35 per cent in the fruit basket against 1.12 per cent recorded a month ago.

Retail inflation for cereals, eggs, milk and related products also cooled. However, it quickened to 8.55 per cent in the fuel category from 8.47 per cent in September.

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Industrial output

Factory output growth for August has been revised slightly upward to 4.6 per cent from the provisional figure of 4.3 per cent. IIP was recorded at 6.9 per cent and 6.5 per cent in June and July this year, respectively. The previous low was recorded at 3.8 per cent in May this year.

Mining output growth fell to 0.2 per cent in September against 7.6 per cent a year ago. Similarly, capital goods output growth slowed to 5.8 per cent from 8.7 per cent a year ago. Manufacturing recorded a growth of 4.6 per cent, up from 3.8 per cent a year ago. Electricity generation, too, improved to 8.2 per cent from 3.4 per cent in September 2017. 

Retail inflation fell to a 13-month low of 3.31 per cent in October because of a drop in the prices of vegetables, pulses and sugar, while industrial output expanded at its slowest pace in four months at just 4.5 per cent in September on the back of a poor performance by the mining sector and lower offtake of capital goods. IIP was 4.1 per cent in September 2017.

Inflation based on Consumer Price Index (CPI) was 3.7 per cent in September 2018 and 3.58 per cent in October 2017. Retail inflation is the lowest since September 2017 when it touched 3.28 per cent. The rate of price rise in the food basket contracted 0.86 per cent in October compared with a 0.51 per cent rise in September.

Aditi Nayar, principal economist at ICRA, said: “Core inflation rose to an uncomfortably high 6.1 per cent in October, led by services such as health, as well as the impact of commodity prices on the inflation for transport and communication, household goods and services and personal care, in sharp contrast to the year-on-year disinflation in food items.”



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