Published: Tue, March 13, 2018
Economy | By

IIP at two-month high in January; February retail inflation eases

IIP at two-month high in January; February retail inflation eases

The Index of Industrial Production (IIP) had grown at 7.1 per cent in December 2017, according to data released by the Central Statistics Office (CSO) on Monday.

IIP grew at 4.1 per cent in April-January this fiscal as compared to 5 per cent in same period in previous financial year.

As many as 16 of the 23 industry groups registered positive growth during the month when compared to the corresponding period in 2017.

"While an unfavourable base effect weighed upon the expansion of consumer non durables, it nevertheless remained in double-digits in January 2018, benefiting from the high growth in sugar, digestive enzymes and antacids, and steroids and hormonal preparations, which have a combined weight of 1.7 percent in the IIP", Nayar said.

Meanwhile, the industrial output grew by 7.5% in January.

Retail inflation cooled for the second consecutive month in February on the back of moderating food prices, while industrial output continued with its strong run in January, bringing a cheer for policymakers battling to fast-track growth and tame price pressures.

As per the use-based classification, the growth rates in January 2018 over January 2017 are 5.8 per cent in primary goods, 4.9 per cent in intermediate goods, and 6.8 per cent in Infrastructure/ Construction Goods.

While the price rise in food segment was 3.26% in February, it was 17.57% in vegetables.

"As expected, CPI inflation eased to 4.44 percent in February 2018, compared to 5.07 percent in the previous month, with all the components witnessing a decline in prices except for health, clothing and footwear, transport and communication".

Prices of pan, tobacco and intoxicants rose by 7.34%.

Economists said that the seasonal trend of rising food prices may curtail the slide in food inflation going ahead that is likely to result in status quo by the RBI in its next policy meeting.

Mining activity's growth further plummeted, growing 0.1 percent in January following December's trend at 1.2 percent, as compared with a robust growth of almost 8.6 percent a year ago.

Before this, factory output grew at a sharpest pace in November 2017 at 8.8 per cent. "Signs of a thaw in rural demand were visible with rural CPI crashing by 84 basis points from the earlier month", the report stated. Also heartening is the performance of consumer durable sector, which has recorded a growth of 8 per cent for the first after demonetisation. "Mining sector is a dampener in IIP data and may be cause of concern from mining related industries", Devendra Kumar Pant, chief economist, India Ratings and Research said.

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