November 13, 2020 12:24:10 am
Retail inflation surged to a 77-month high of 7.61 per cent in October, complicating the task of the Reserve Bank at a time when Covid-induced risks to economic growth still remain too high for comfort.
Meanwhile, despite higher output in the sectors of mining and power generation, industrial production remained flat at 0.2 per cent growth in September, official data showed on Thursday.
According to the Index of Industrial Production (IIP) data, manufacturing sector output posted a decline of 0.6 per cent. Production in mining and power segments grew at 1.4 per cent and 4.9 per cent, respectively.In September 2019, the IIP had contracted by 4.6 per cent.
For policymakers, the stubbornness of retail inflation adds to their woes. It has stayed above the tolerance band of 4 (+/-2) per cent of the Reserve Bank’s Monetary Policy Committee for 10 of the last 11 months, despite purported Covid-induced demand compression in the economy. Food inflation spiked to 11.07 per cent in October, against 10.68 per cent in the previous month, remaining the bigest driver of the consumer price index (CPI). FE
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