Jan IIP growth slows, Feb inflation eases marginally

The repo rate currently stands at 6.5% and has remained unchanged since February 2023.

Within IIP, manufacturing output growth eased to 3.2% in January from 4.5% in December, while mining’s production growth rose to 5.9% from 5.2%. Electricity’s output growth came in at 5.6% in January as against 1.2% in December. (Representational Image)

India’s retail inflation based on the Consumer Price Index (CPI) stood at 5.09% in February, roughly the same level as in January. The easing of price pressures in manufactured goods, however, has been steeper, with “core” inflation falling to 3.3% — the lowest in the current CPI series with base year 2012.

The easing of headline inflation to a four-month low was helped by the statistical effect of a high base, as price pressures rose sequentially due to costlier food, data released by the National Statistical Office (NSO) showed Tuesday. In February 2023, CPI inflation was at 6.44%.

Separate data released by the NSO showed factory output growth, measured by the Index of Industrial Production (IIP), easing to 3.8% in January from 4.2% in December, thanks to a high base effect. In January 2023, IIP had grown 5.8% y-o-y.

Also Read | Industrial production grows 3.8 % in January

The latest inflation print is largely in line with the consensus estimate. An FE poll of 17 economists last week projected the headline figure to come in at 5%.
Despite easing price pressures, economists do not expect policy repo rate cuts in the near-term, with many expecting the rate cut cycle to begin with the August policy review.

Indias IIP growth, January IIP growth, February inflation, Indias retail inflation, Index of Industrial Production, Consumer Price Index, CPI inflation, National Statistical Office, NSO inflation datal, economy news, indian express news

Food inflation increased to 8.66% in February from 8.30% in January.

The repo rate currently stands at 6.5% and has remained unchanged since February 2023.

The average CPI inflation in January-February was 5.1%, and in order to be in line with the 5% rate for Q4FY24, projected by the Reserve Bank of India, the headline figure will have to ease further to 4.9% during March. But economists expect the March figure to come in at 5.1-5.2%.

Food inflation increased to 8.66% in February from 8.30% in January. It remains the main driver of the headline figure, and is expected to do so in future.

Story continues below this ad

Meanwhile, within IIP, manufacturing output growth eased to 3.2% in January from 4.5% in December, while mining’s production growth rose to 5.9% from 5.2%. Electricity’s output growth came in at 5.6% in January as against 1.2% in December.

On a month-on-month basis, manufacturing output declined 0.9% in January. FE