NEW DELHI: The country’s economy got some relief as retail inflation cooled to a 10-month low of 3.69 per cent in August, mainly due to falling fruits and vegetables prices, while industrial production grew at 6.6 per cent in July, supported by the manufacturing sector and higher demand for capital goods and consumer durables.
The inflation-based on Consumer Price Index was recorded at 4.17 per cent in July and 3.28 per cent in August this year. The August inflation numbers will be an important factor when the RBI meet on October 5 for its bi-monthly monetary policy.
According to Madan Sabnavis, chief economist, CARE Ratings, “Going ahead, the cushion of declining food prices may be reversed if the MSP is effective. We are looking at CPI inflation in 5 to 5.5 per cent range by end of March.”According to the data released by Central Statistics Office, Index of Industrial production (IIP) grew at 6.6 per cent in July. IIP had expanded by 1 per cent in July last year. The manufacturing sector recorded a 7 per cent growth during the period against a contraction of 0.1 per cent a year ago.
The ‘manufacture of furniture’ category has shown the highest positive growth of 42.7 per cent, followed by 30.8 per cent growth in ‘manufacture of computer, electronics and optical products’ and 28.4 per cent in ‘manufacture of tobacco products’ category.
The consumer durables sector recorded a growth of 14.4 per cent in July against a dip of 2.4 per cent a year ago. Capital goods production grew by 3 per cent against a decline of 1.1 per cent in the previous year. In terms of industries, 22 out of 23 industry groups in the manufacturing sector showed positive growth during July 2018. IIP growth for June was revised downwards to 6.8 per cent from the provisional estimate of 7 per cent released last month.