Factories power up; retail inflation falls

The Indian economy showed signs of resilience at the beginning of the year as industrial output rose and inflation fell, data released on Monday showed.

- Rhik Kundu

While industrial output growth rose to 3.8% in December after falling to an eight-month low of 2.4% in November, consumer price index (CPI)-based retail inflation fell to a three-month low of 5.1% in January, the statistics ministry said.

The latest factory output points to a pick-up in manufacturing momentum in December after a slowdown.

In the April-December period, factory output expanded 6.1%, a notch above the 5.4% figure in the same time a year earlier.

January inflation fell to 5.1% from 5.7% in December, aided by a slower rise in prices of food items like cereals, milk and milk products, fruits, pulses and spices. It still remains above the central bank's target of 4%, but has stayed within its tolerance range of 2-6% for the fifth consecutive month.

Overall, food inflation fell to 8.3% in January, down from 9.53% in December, which saw a sharp rise in prices of vegetables and other food items such as pulses, spices, and cereals.

Food inflation, measured by the consumer food price index, accounts for nearly half of the overall consumer price basket. It stood at 8.7% in November, 6.61% in October and 6.62% in September.