by admin | May 25, 2021 | Banking, Business, Commodities, Commodities News, Economy, Markets, News, SMEs
New Delhi : Lower food prices eased India’s July retail inflation to 4.17 per cent from 4.92 per cent in June, even as it continued to rule over the Reserve Bank of India (RBI)’s medium-term inflation target of 4 per cent, official data showed on Monday.
However, on a year-on-year (YoY) basis, the Consumer Price Index (CPI) in July 2018 was higher than in the corresponding period last year, when retail inflation stood at 2.36 per cent.
According to the data furnished by the Central Statistics Office (CSO), the Consumer Food Price Index (CFPI) rose 1.37 per cent in July from 2.91 per cent in June 2018.
Product-wise, prices of milk-based products, eggs, meat and fish pushed the retail inflation higher on a YoY basis.
In contrast, deflation in the cost of vegetables, pulses and sugar capped the overall food prices.
Accordingly, the prices of milk-based products rose by 2.96 per cent, while cereals became dearer by 2.92 per cent and meat and fish prices recorded a rise of 2.26 per cent.
On the other hand, the category of “pulses and products” became cheaper by (-) 8.91 per cent and that of “sugar and confectionery” by (-) 5.81 per cent.
The sub-category of food and beverages during the month under consideration recorded a rise of 1.73 per cent over the same period last year.
Among non-food categories, the “fuel and light” segment’s inflation rate accelerated to 7.96 per cent in July.
Continuing with the reversal of accommodation begun in June, the RBI earlier this month again hiked its key lending rate by 25 basis points to bring the repo to 6.50 per cent citing upside risks to inflation.
Addressing the media on the hike in the repo, or the short-term lending rate for commercial banks, Governor Urjit Patel said its monetary policy committee (MPC) noted that the rise in retail inflation had continued for the third consecutive month.
“The decision of the MPC is consistent with the neutral stance of monetary policy in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth,” the RBI said.
The central bank, however, maintained its “neutral” stance on policy, as it has done over five previous bi-monthly policy reviews which allows it to move either way on rates.
Commenting on the CPI numbers, Deloitte India Lead Economist Anis Chakravarty said in a statement: “Inflation continued to remain fuelled by higher oil prices as increasing levels of core inflation, especially housing, clothing, and miscellaneous activities. The movement in food inflation has also increased and is likely to follow an upward trajectory due to MSP increase.”
“Given that inflation remains above the medium term target of 4 per cent and the scales are tilted to the upside, the recent increase in key policy rate may provide some respite,” he added.
—IANS
by admin | May 25, 2021 | Business, Commodities, Commodities News, Economy, Markets, News, SMEs
New Delhi : Retail inflation in India touched the 5 per cent mark in June, compared to 4.87 per cent in May, even as industrial output in May grew at 3.2 per cent over the same month last year but declined as compared to rise of 4.9 per cent in April mainly on account of a decline in manufacturing, official data showed on Thursday.
As per data released by the Central Statistics Office (CSO), the average annual rate of inflation as per the consumer price index (CPI) in June last year was 1.46 per cent.
The consumer food price index (CFPI) in June at 2.91 per cent, however, softened as compared to the 3.10 per cent of the previous month. The inflation in vegetables dropped to 7.8 per cent from 8.04 per cent in the previous month.
The CPI for the ‘fuel and light’ category rose to 7.14 per cent in June, from 5.8 per cent in May.
The higher inflation last month comes in the backdrop of rising global crude oil prices which have been ruling at over $75 a barrel.
Breaking the cycle of interest rate cuts begun in January 2015, the Reserve Bank of India (RBI), at its last monetary policy review in June, raised its repo rate by 25 basis points to 6.25 per cent citing inflationary concerns.
It also revised upwards its inflation projection to 4.8-4.9 per cent for the first half of the current fiscal.
The fall in the Index of Industrial Production in May was caused by a sharp slowing in the growth of the manufacturing sector which registered a growth of 2.8 per cent, as compared to 5.2 per cent in April.
“The industry group ‘Other manufacturing’ has shown the highest negative growth of (-) 31.9 percent followed by (-) 15.6 percent in ‘Manufacture of tobacco products’ and (-) 12.8 percent in ‘manufacture of wearing apparel’,” a CSO statement said.
“The industry group ‘Manufacture of computer, electronic and optical products’ has shown the highest positive growth of 27.0 per cent followed by 21.1 percent in ‘Manufacture of motor vehicles, trailers and semi-trailers’ and 13.2 percent in ‘Manufacture of furniture’.”
Mining output in May at 5.7 per cent in May improved marginally over the 5.1 per cent in April.
Electricity production in the month under consideration rose to 4.2 per cent over the 2.1 per cent in April.
The cumulative IIP growth for the period April-May 2018 over the corresponding period of the previous year stands at 4 per cent, the statement added.
The IIP for April has been revised to 4.8 per cent, from the earlier figure of 4.9 per cent.
Commenting on the IIP data, Deloitte India Lead Economist Anis Chakravarty said in a statement: “The recent easing came largely on the back of manufacturing, while improvements were made across mining and electricity. That said, the movement in manufacturing remains largely steady which bodes well for economic growth, especially when the economy remains at risk from global changes.”
“A clear positive was on food price momentum that remained muted… Although core remains elevated that may keep RBI on guard. We have not yet removed the ‘risk’ of one more rate hike,” said Yes Bank Group President Shubhada Rao.
—IANS
