NEW DELHI: Two sets of data released on Thursday brought cheers to the Indian economy. Consumer price index (CPI)-based inflation in September dropped to a three-month low of 5.02% while the country’s industrial production growth, measured by the index of industrial production (IIP), zoomed to a 14-month high of 10.3% in August.
The moderation in retail inflation is mainly because of a dip in food and fuel prices, while the robust IIP numbers are attributed to good performance of manufacturing, mining and power sectors. Food and fuel prices have 50% weightage in the inflation index.
Vegetable prices fell 19% month-on-month in September; consumer food prices index showed a 2.18% drop. However, compared with September 2022, food inflation is still higher at 6.3% with big spikes in pulse and spices prices.
“Inflation pressure in cereals, pulses, and milk has been persistent. The key risk remains from food inflation due to the uneven monsoon performance,” said Gaura Sengupta, economist at IDFC First Bank.
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