August inflation down at 3.69 percent from 4.17, July industrial output eases

New Delhi, Sep 12 (IANS) Lower food prices eased India's August retail inflation to 3.69 percent from 4.17 percent in July, while industrial output in July slowed with a lower rise of 6.6 percent compared with 6.87 percent in June, official data showed on Wednesday.

Industry described the latest estimates of output as a positive sign towards the growth cycle

On a year-on-year (YoY) basis, the Consumer Price Index (CPI), or retail inflation, in August was higher than in the corresponding period last year when it stood at 3.28 percent.

According to the data furnished by the Central Statistics Office (CSO), the Consumer Food Price Index (CFPI) rose 0.29 percent in August from 1.30 percent in July 2018.

Product-wise, prices of milk-based products, eggs, meat, and fish pushed the retail inflation higher on a YoY basis.

In contrast, deflation in the cost of vegetables, pulses, and sugar capped the overall food prices. The category of "pulses and products" became cheaper by (-) 7.76 percent and that of "sugar and confectionery" by (-) 5.45 percent.

Among non-food categories, the "fuel and light" segment's inflation rate accelerated to 8.47 percent in August.

India's industrial output also eased marginally in July with a slower rise of 6.6 percent compared with 6.87 percent in June, official data showed on Wednesday.

The CSO's the Index of Industrial Production (IIP) in July was higher on YoY basis.

"The cumulative growth for April-July 2018 over the corresponding period of the previous year stands at 5.4 percent," as per the Quick Estimates of IIP for July 2018.

On a YoY basis, factory output growth expanded by 7 percent while the mining sector's production rose by 3.7 percent and the sub-index of electricity generation increased by 6.7 percent.

Among the six use-based classification groups, the output of primary goods -- with the highest weight of 34.04 -- grew by 6.9 percent. The output of intermediate goods, with the second-highest weight, rose by 1.2 percent.

Similarly, consumer non-durables' output rose during the month by 5.6 percent and that of consumer durables by 14.4 percent.

In addition, infrastructure or construction goods output increased by 8.4 percent and capital goods by 3.0 percent.

Commenting on the data, Economic Affairs Secretary Subhash Chandra Garg tweeted: "August consumer price index at 3.69 percent (down from 4.17 percent in July) indicates further moderation in retail inflation. Food inflation in August at .29 percent only guards the majority of the poor against any rise in prices. Sound Indian macroeconomic story continues."

Terming the latest IIP estimates as a positive sign towards the growth cycle of industrial activity, industry body Assocham said the numbers state an optimistic outlook for the economy.

"The IIP index accelerated in July 2018, which is 6.6 percent higher compared with 1.0 percent in July 2017, mainly pulled up by strong performance in manufacturing, electricity, primary goods, capital goods, infrastructure/construction, consumer durable goods, and non-consumer durable goods," Assocham Secretary General Uday Varma said in a statement.

"Further, the rise in output of capital goods sector is indicative of an improvement in investment demand," he added.