India’s industrial output, measured by the Index of Industrial Production (IIP), came in at a twelve month-high of 19.6 per cent for the month of May, compared with 7.1 per cent in April, data from the National Statistical Office showed on Tuesday.
Meanwhile, consumer Price Index-based inflation (CPI) for the month of June came in at 7.01 per cent, making it two straight quarters of headline retail inflation being above the Monetary Policy Committee’s medium-term target of 4 (+/-2) per cent, thus signaling further rate hikes by the Reserve Bank of India.
CPI for June was primarily driven by sticky food prices. Consumer Food Price inflation was 7.75 per cent in June compared with 7.97 per cent in May. CPI for May was 7.04 per cent. In April, headline retail inflation had touched an eight-year high of 7.79 per cent.
The sub-groups that saw the sharpest year-on-year hike in June included vegetables, spices, fuel and light, and footwear.
On June 8, the six-member MPC of the RBI unanimously decided to raise the repo rate by 50 basis points. This followed an off-cycle rate hike of 40 basis points, making it 90 bps rate hike in just a span of a little over a month, and analysts expect two more rounds of big rate hikes.
On the industrial output front, the biggest driver was electricity, which rose 23.5 per cent. Manufacturing output grew by 20.6 per cent, while mining output grew by 10.9 per cent.
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