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India's retail inflation cools down to 4.35 per cent in September on high base

According to data released by the Ministry, food inflation measured by Consumer Food Price Index (CFPI) dropped to 0.68 per cent in September from 3.11 per cent in August.

Published: 12th October 2021 11:35 PM  |   Last Updated: 13th October 2021 09:41 AM   |  A+A-

Vegetables, inflation

The Consumer Price Index-based inflation was at 7.27 per cent in September 2020 and 5.3 per cent in August this year. (File Photo| EPS)

By Express News Service

NEW DELHI: High base from the last year and softening food prices has helped India’s retail inflation, falling to a five-month low in September despite surge in the fuel prices while industrial production surged by 11.9 per cent, reaching closer to pre-Covid level.

The Consumer Price Index-based (CPI) inflation was at 7.27 per cent in September 2020 and 5.3 per cent in August this year. According to data released by the National Statistical Office (NSO), the inflation in food basket eased to 0.68 per cent in September 2021, significantly down from 3.11 per cent in the preceding month, even when oils and fats category saw inflation at 34.19 per cent. Fuel and lights basket saw inflation at 13.63 per cent, transportation and commutation inflation also stayed at 9.93 per cent while health inflation was at 7.74 per cent, weighing heavy on the household budget.

RBI has projected the CPI inflation at 5.3 per cent for 2021-22: 5.1 per cent in second quarter, 4.5 per cent in third; 5.8 per cent in last quarter of the fiscal, with risks broadly balanced. “While the picture seems rosy for now on inflation, we might not be out of the woods yet with global stagflationary concerns rising. “Energy shortage and rising oil prices are already having ripple effects on production and prices of other commodities. This remains an upside risk for inflation once the base effect wears off from December,” Sakshi Gupta, Senior Economist, HDFC Bank, said.

Industrial output grows 11.9 per cent in August
The Index of Industrial Production was up by 11.9 per cent y-o-y in August.  As per the Index of Industrial Production (IIP) data by the National Statistical Office (NSO), the manufacturing sector’s output surged 9.7 per cent in August 2021, mining output climbed 23.6 per cent, and power generation increased 16 per cent. The IIP had contracted 7.1 per cent in August 2020.

“... IIP rose by 3.9 per cent in August 2021 relative to the pre-Covid level of August 2019, led by all the categories except consumer durables, highlighting the enduring impact of the pandemic on big-ticket demand,” Aditi Nayar, Chief Economist, ICRA, adding with excess rainfall affecting mining, electricity and construction, and the non-availability of semiconductors impinging upon auto output, IIP growth may dip sharply to 3-5 per cent in September.

At ease
Inflation in food basket eased to 0.68 per cent in Sept, down from 3.11 per cent in August, even when oils and fats saw inflation at 34.19 per cent. Fuel and lights basket saw inflation at 13.63 per cent



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