Retail inflation eases to 6.58%, industrial production quickens

Food inflation abates; faster output growth in mining, manufacturing

March 13, 2020 04:40 am | Updated 04:40 am IST - New Delhi

Retail inflation based on the Consumer Price Index slowed to 6.58% in February, while the industrial production growth as measured in the Index of Industrial Production (IIP) quickened to 2% in January amid subdued performance by the manufacturing sector, official data released on Thursday showed.

Retail inflation, which was 7.59% in January 2020 and 2.57% in February 2019, slowed mainly due to easing food prices. Inflation in the food basket was 10.81% February 2020, lower from 13.63% in the previous month, as per data from Ministry of Statistics and Programme Implementation.

The government has mandated the central bank to keep inflation at 4% with a margin of two percentage points on on either side.

“The moderation in inflation has expectedly been led largely by food inflation while core inflation remains muted amid tepid demand,” Upasna Bhardwaj, Economist at Kotak Mahindra Bank said. “We expect the inflation trajectory to continue to moderate going ahead led by deflationary trends from falling crude oil prices, lower food prices and weak demand.”

She added that with domestic and global growth expected to face downside risks from the spread of COVID-19 and deflationary forces emerging, “we see room for up to 50 bps of rate cut by the MPC, with any further easing contingent on the evolving growth environment.”

The IIP had accelerated 1.6% in January 2019. For January 2020, official data showed that the mining sector output grew 4.4% against a rise of 3.8%, manufacturing output rose 1.5% compared with 1.3% in the year-ago month, and electricity generation rose 3.1% versus 0.9% in January 2019.

Cumulative IIP growth for the period April-January 2019-20 over the corresponding period of the previous year stands at 0.5%, as against a growth of 4.4% in the corresponding period of 2018-19.

Top News Today

Sign in to unlock member-only benefits!
  • Access 10 free stories every month
  • Save stories to read later
  • Access to comment on every story
  • Sign-up/manage your newsletter subscriptions with a single click
  • Get notified by email for early access to discounts & offers on our products
Sign in


Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.

We have migrated to a new commenting platform. If you are already a registered user of The Hindu and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.