CPI Inflation November, India IIP Data October 2022: Retail inflation eases to a 11-month low of 5.88% in Nov, IIP contracts 4% in Oct, shows Govt data

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.

The CPI data is factored in by the central bank while preparing its bi-monthly monetary policy. Last week, the Monetary Policy Committee (MPC) hiked the repo rate by 35 basis points (bps) to 6.25 per cent. So far in this financial year, the MPC has raised the key interest rate by 225 bps in a bid to check the raging inflation.

While announcing the decisions of the MPC meeting last week, RBI Governor Shaktikanta Das said that RBI estimates the FY23 CPI at 6.7 per cent. The CPI inflation forecast for the October-December quarter (Q3) was raised to 6.6 per cent from 6.5 per cent and the forecast for the January-March quarter (Q4) was raised to 5.9 per cent from 5.8 per cent.

The Consumer Food Price Index (CFPI) or the inflation in the food basket too eased month-on-month in November to 4.67 per cent, from 7.01 per cent in October, the data revealed.

Prices of vegetables contracted (-)8.08 per cent on year in November while the oils and fats declined (-)0.63 per cent and that of sugar and confectionery slipped (-)0.25 per cent. Apart from these, the spices saw a rise of 19.52 per cent while that cereals and products gained 12.96 per cent and milk and products rose 8.16 per cent. Pulses and products grew 3.15 per cent.

Apart from food and beverages, the fuel and light segment rose 10.62 per cent, clothing and footwear gained 9.83 per cent and the housing segment inched up 4.57 per cent.

Industrial output (IIP)

India’s factory output, which is measured in IIP witnessed a contraction of (-)4.0 per cent on-year to 129.6 in october, a separate data released by the MoSPI showed.

The IIP had risen 4.2 per cent in October 2021, the data showed.

The industrial output so far in the fiscal year 2022-23 (April-October) has risen 5.3 per cent, compared to a spike of 20.5 per cent in the corresponding period a year ago, the data showed.

The IIP contractiobn in October was primarily because of the manufacturing sector. The manufacturing sector contracted (-)5.6 per cent on-year to 128.7 in October while the mining sector saw a rise of 2.5 per cent to 112.5 and electricity sector grew 1.2 per cent to 169.3, the MoSPI data showed.

In October last year, the manufacturing sector had risen 3.3 per cent. During the same month, the mining sector surged 11.5 per cent, while the electricity sector had witnessed a growth of 3.1 per cent, the data showed.