India’s retail inflation rises marginally to 4.48% in Oct; IIP grows 3.1% in Sep – Mint

Inflation as defined by consumer price index (CPI) was 7.61% in the year-ago period.

Food inflation has also increased slightly to 0.85% in October from 0.68% in September.

“While the October inflation print was comfortably below 5% and perfectly in line with our expectations, near-term headwinds with respect to food price inflation owing to shortage of fertilisers remain a key upside risk to watch for,” said Garima Kapoor, Economist – Institutional Equities, Elara Capital.

Inflation from the food and beverages segment remained low at 1.82%, while that from the fuel and light category stayed elevated at 14.35%.

Within the food prices, vegetables inflation stood at -19.43% in October.

Prices of oils and fats eased slightly to 33.50% for the month under review as compared to 34.19% in September. Meanwhile, inflation in the milk and products rose to 3.19% as against 3.13% in the last month.

“The rise in the CPI numbers comes at a crucial juncture as RBI will be meeting next month for their monetary policy. Inflation may have risen, but it may be transient as supply-side issues get addressed. Despite the rise in the CPI data, it remains in the RBI targetted range of 2-6%. The cut in the excise duty is likely to provide some relief and help ease inflation. A good monsoon year and return to normalcy may lead to softness in inflation in the coming months. Largely the rise in inflation is unlikely to have any bearing in key rates by MPC,” said

D R E Reddy, CEO and Managing Partner at CRCL LLP

The Reserve Bank of India (RBI)in its latest monetary policy meeting lowered the inflation forecast at 5.3% for the current financial year from an earlier estimate of 5.7%.

Inflation has stayed within the Central Bank’s tolerance band of 2%-6% for the fourth consecutive month.

Meanwhile, industrial production for the month of September grew by 3.1% as compared to 1% in the same month last year, according to the data released by ministry of statistics and programme implementation (MoSPI). IIP surged 11.9% in the month of August.

The mining output during the September month grew by 8.6%, while manufacturing sector surged 2.7%.

Meanwhile, the electricity generation in September grew 0.9%. Industrial production has been surging for the past few months mainly due to low-base of last year, but the latest print suggests the effect is waning.