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Inflation chills rate hopes; IIP recovers
Mint Mumbai
|November 13, 2024
At 6.21%, retail inflation crosses all estimates; factory output up
Hopes of a December rate cut died on Tuesday as retail inflation shot to a 14-month high, even as the economy consoled itself with a sequential recovery in industrial production.
Retail inflation based on the consumer price index (CPI) hit 6.21% in October, statistics ministry data showed, days after Reserve Bank of India governor Shaktikanta Das cautioned that the month's reading could be "very high". This is the highest since 6.83% in August 2023, and compares to 5.49% in September.
Meanwhile, factory output as measured by the index of industrial production (IIP) rose 3.1% year-on-year (y-o-y) in September, fuelled by growth in manufacturing, the statistics ministry data showed.
While that is a rebound from the 0.1% contraction seen in August, it is still lower than the industrial output reported during nine of the past 12 months.
The rise in inflation, driven by surging food prices, also breached the RBI's medium-term target of 2-6% for the first time in over a year.
This story is from the November 13, 2024 edition of Mint Mumbai.
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