Retail inflation spikes to a 5-month high of 7.41% in Sep, IIP contracts 0.8% in Aug: Govt data

India Inflation Rate September 2022, IIP Growth Rate August 2022: The retail inflation, measured by the Consumer Price Index (CPI), spiked to 7.41 per cent in September. Separately, the factory output, measured in terms of the Index of Industrial Production (IIP), contracted by (-)0.8 per cent in August.

By: Express Web Desk
New Delhi | Updated: October 12, 2022 08:03 PM IST

3 min read

CPI, IIP, WPI Data Today: People buying vegetables at a vegetable market in Patiala. (Express photo by Harmeet Sodhi)

India CPI Inflation Rate September, IIP Growth August 2022: India’s retail inflation, which is measured by the Consumer Price Index (CPI), rose to a five-month high of 7.41 per cent in the month of September, up from 7.00 per cent in August. Separately, India’s factory output, measured through the Index of Industrial Production (IIP), witnessed a contraction of (-)0.8 per cent in August, two separate data released by the Ministry of Statistics & Programme Implementation (MoSPI) showed on Wednesday.

This is the ninth consecutive time that the CPI print has come above the Reserve Bank of India’s (RBI) upper margin of 6 per cent. The government has mandated the central bank to maintain retail inflation at 4 per cent with a margin of 2 per cent on either side for a five-year period ending March 2026.

A recent Reuters poll of economists had forecast the September CPI to spike to 7.30 per cent.

CPI data is primarily factored in by the RBI while preparing their bi-monthly monetary policy. On September 30, the Monetary Policy Committee (MPC) hiked the repo rate by 50 basis points (bps) to 5.90 per cent. So far in this financial year, the MPC has raised the key interest rate by 190 bps in a bid to check the raging inflation. However, despite their move, retail inflation continues to remain above the upper tolerance level.

The Consumer Food Price Index (CFPI) or the inflation in the food basket too showed a month-on-month rise during September to 8.60 per cent, from 7.62 per cent in August, the data revealed.

Prices of vegetables rose 18.05 per cent on year in September. Apart from this, the spices saw a rise of 16.88 per cent while that cereals and products gained 11.53 per cent and milk and products rose 7.13 per cent. Egg prices slipped (-)1.79 per cent but fruits grew 5.68 per cent.

Apart from food and beverages, the fuel and light segment rose 10.39 per cent, clothing and footwear spiked 10.17 per cent and the housing segment inched up 4.57 per cent.

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Industrial output (IIP)

India’s factory output, which is measured in IIP witnessed a contraction of (-)0.8 per cent on-year to 131.3 in August, a separate data released by the MoSPI showed.

The IIP had risen 13.0 per cent in August 2021, the data showed.

The industrial output so far in the fiscal year 2022-23 (April-August) has risen 7.7 per cent, compared to a spike of 29.0 per cent in the corresponding period a year ago, the data showed.

The IIP contractiobn in August was mainly because of manufacturing and mining sectors. The manufacturing sector contracted (-)0.7 per cent on-year to 131.0 in Augus while the mining sector saw a decline of (-)3.9 per cent to 99.6. The electricity sector was the only one that witnessed a growth of 1.4 per cent to 191.3, the MoSPI data showed.

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In August last year, the manufacturing sector had witnessed a rise of 11.1 per cent. During the same month, the mining sector had surged 23.3 per cent, while the electricity sector had witnessed a growth of 16.0 per cent, the data showed.

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