Retail Inflation Down 5.59%; June IIP Up 13.6%

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Retail Inflation Down 5.59%; June IIP Up 13.6%
Credit: © Reuters.

By Aditya Raghunath

Investing.com -- According to data from the National Statistical Office (NSO), India’s Consumer Price Index (CPI), or retail inflation, came down to 5.59% in July. This is a massive improvement from the 6.26% in June.

This is within the limits of 4% (+/- 2) the Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC). The Consumer Food Price Index (CFPI) eased to 3.96% from 5.15% in June.

This is the first time in six months that CPI has fallen below 6%. The government has asked RBI to keep inflation at 4% with a margin of 200 basis points on either side. Retail inflation plays a very important role in the MPC’s decisions to tinker with key policy rates.

Meanwhile, India’s Index of Industrial Production (IIP) moved up 13.6% in June thanks to a solid performance in the manufacturing, mining and power sectors but overall output is still below pre-pandemic levels of June 2019. IN June 2020, IIP had contracted 16.6%.

The manufacturing sector grew 13% in June. This sector makes up 77.63% of the IIP. Mining rose 23.1% while power generation was up 8.3%.

“The growth rates over corresponding period of previous year are to be interpreted considering the unusual circumstances on account of COVID-19 pandemic since March 2020,” NSO said in a statement.

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