IIP quickens to 7.5%, inflation softens

Darnell Taylor
March 12, 2018

Industrial production grew at a high rate of 7.5 percent in January 2018 against 3.5 percent in the year-ago month on the back of good show by manufacturing coupled with higher offtake of consumer and capital goods.

Inflation for the fuel and light category was at 6.80 per cent in February (against 7.73 per cent in January).

As per use-based classification, the growth rates in January 2018 over January 2017 are 5.8 percent in primary goods, 14.6 percent in capital goods, 4.9 percent in intermediate goods and 6.8 percent in infrastructure/construction goods. However, growth in the mining sector was muted in January 2018.

Inflation as measured by the CPI slowed to 4.44% in February from 5.07% in January, mostly due to easing food and fuel prices.

Retail inflation, as measured by the Consumer Price Index (CPI), eased to 4.4% in February, following two months of figures above 5%. The decline was supported by a sharp moderation in vegetable inflation to 17% in February 2018 against 27% in January 2018 and a continuous dip in pulses and products inflation.

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Dutch industrial production expanded at the quickest pace in nearly seven years in January, figures from the Central Bureau of Statistics showed Monday.

In January, apparel played a major role in boosting inflation, with the biggest rise in prices in about 28 years. In terms of industries, 16 out of 23 industry groups in the manufacturing sector showed positive growth during January, 2018.

On the other hand, the cumulative growth in these three sectors during April - January 2017-18 over the corresponding period of 2016 - 17 has been 2.5 percent, 4.3 percent and 5.3 percent respectively. The RBI in its monetary policy review last month had estimated retail inflation at 5.1% for January-March 2018.

Besides, industry bodies yet again nudged the RBI to lower interest rate as retail inflation fell to a 4-month low of 4.44 percent in February.

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