Retail inflation eases to 5.59% in July; industrial output grows 13.6% in June

NEW DELHI: Retail inflation based on consumer price index (CPI) eased to 5.59 per cent in the month of July as against 6.26 per cent in June, government data showed on Thursday.
The ease in inflation figures can be largely attributed to softening food prices.
According to the data released by the National Statistical Office (NSO), inflation in the food basket slowed down to 3.96 per cent in July from 5.15 per cent in the previous month.
The inflation numbers remained within the Reserve Bank of India’s (RBI) comfort level after two months.
RBI’s monetary policy committee (MPC) has been tasked by the government to keep inflation in a band of 2-4 per cent, with a tolerance level of 2 per cent on either side.
In its bi-monthly monetary policy meet last week, the RBI raised retail inflation forecast for 2021-22 to 5.7 per cent due to supply side constraints, high crude oil and raw materials cost.
A deadly second wave of coronavirus infections in April and May led to many states reimposing lockdowns, constraining supply chains and leading to a spike in inflation.
However, that did not prompt the Monetary Policy Committee to raise the key repo rate from 4.0% this month as the focus remained more on containing the economic fallout from the pandemic.
In a separate set of data, the industrial production for the month of June surged to 13.6 per cent.
According to the Index of Industrial Production (IIP) data released by the National Statistical Office (NSO), the manufacturing sector’s output surged by 13 per cent in June 2021.
The mining output climbed 23.1 per cent and power generation increased by 8.3 per cent in June.
The IIP had contracted 16.6 per cent in June 2020.

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Author: Shirley