 "No greenshoots: retail inflation spirals to 10.09%, factory output crawls")
India’s industrial production grew just about 2 percent during the September and retail inflation for October hit double digits at 10.09 percent, raising fears that the pain for the economy is likely to continue as the RBI shuns growth in its bid to control inflation.
“CPI at 10.09 percent is certainly disturbing and leaves limited room for RBI,” said C Rangarajan, chairman of the Prime Minister’s Economic Advisory Council.
The output in the mining, manufacturing and electricity sectors grew 3.3 percent, 0.6 percent and 12.9 percent on year, respectively. The cumulative growth in the three sectors during April-September has been (-) 2.5%, 0.1% and 5.9%, respectively.
As many as 13 out of the 22 industry groups in the manufacturing sector have shown positive growth during the month. Basic goods and intermediate goods output grew 5.4 percent and 4.1 percent, while capital goods declined 6.8 percent.
“While electricity and mining were in line with estimates, manufacturing numbers have disappointed despite revival in exports,” said Aditi Nayar of Icra.
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Retail inflation hits double digits. AFP[/caption]
Despite being the festival season, consumer durables production declined 10.8 percent, while consumer non-durables grew 11.3 percent. Consumer goods grew 0.6 percent overall.
Retail inflation for October stood at 10.09 percent, higher than 9.84 percent recorded in the previous month. The corresponding provisional inflation rates for rural and urban areas for October 2013 are 10.11% and 10.20% respectively. But the big disappointment was food inflation which rose to 12.56 percent in October from 11.4 percent in September.
Inflation rates (final) for rural and urban areas for September 2013 are 9.71% and 9.93% respectively.
“CPI looks to be a zone where more monetary policy action will be warranted,” said Samiran Chakraborty, Regional Head Research, India, Standard Chartered Bank.