India’s industrial output grew at 7.1 per cent in February from a year earlier, the government data showed on Thursday. As per the data released by the Central Statistics Office (CSO), India’s industrial output was 1.2 per cent in the same month last year.
Moreover, the retail inflation eased to 4.28 per cent, a five-month low in March, but remained above RBI’s medium-term target, supporting views that monetary policy is likely to remain unchanged at the next review in early June. The retail inflation slowed down mainly on account of easing food prices including vegetables.
The inflation based on Consumer Price Index (CPI), a key data factored in by the RBI to arrive at interest rate, was 4.44 per cent in February. However, the March 2018 inflation is higher than 3.89 per cent recorded in the same month last year.
As per CSO data, inflation in the vegetables segment cooled to 11.7 per cent in March from 17.57 per cent in the previous month. The rate of price rise in the protein rich items like eggs, milk and other products too moderated in March as against the previous month.
However, inflation in fruits basket was higher. Overall, inflation in the food basket was 2.81 per cent, lower than 3.26 per cent in February. The CSO data further revealed that inflation in the fuel and light segment also came in lower at 5.73 per cent month-on-month basis.
The retail inflation rate has been moderating since it hit a 17-month high of 5.2 percent in December. It had crossed the 12-percent mark in 2013, but has remained under control since, thanks to lower crude oil prices, tighter monetary policy and fiscal measures.
The RBI, which has kept rates steady since a cut of 25 basis points in August, is widely expected to maintain rates at their current level in the next review due on June 6. Last week, RBI lowered its April-September retail inflation projection to 4.7 percent to 5.1 percent, from a previous range of 5.1 percent to 5.6 percent released in February.
(With inputs from PTI and Reuters)