Factory production up 7.5% in January, February inflation eases

6% in the first half of the financial year starting 1 April before easing in the second half

Factory production up 7.5% in January, February inflation eases

The consumer price index probably rose 0.2 percent in February from the previous month, after a 0.5-percent jump in January, according to the median estimate of economists surveyed by Bloomberg News ahead of Labor Department figures due Tuesday.

The industrial output had increased 7.1% in December 2017 compared to the output in December 2016. It was 4.88 percent in November previous year. However, growth in the mining sector was muted in January 2018.

Consumer food price inflation, a metric to gauge changes in monthly kitchen costs, fell to 3.38 percent in February as compared with a 4.58 percent growth in January.

India's factory production grew in January to 7.5 per cent over the same month a year ago, and marginally over the 7.1 per cent recorded in December 2017, official data showed on Monday.

Besides, he said, even though the consumer inflation at 4.4 percent in February may be lower, the undercurrent remains biased on the upside, "making RBI disinclined towards any rate cut, though the industry would like it to happen". In January it was at around 5.1 percent.

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"This easing appears to have come largely on the back of a slowdown in the food price inflation on account of one-off seasonal factors", Richa Gupta, senior economist and senior director, Deloitte India said.

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. In January, retail prices of vegetables rose almost 30%. Fuel inflation, meanwhile, rose to 6.80% in February 2018 compared to 7.64% in January 2018.

Ministry of Statistics and Programme Implementation, has revised the Base Year of the Consumer Price Index (CPI) from 2010=100 to 2012=100 with effect from the release of indices for the month of January 2015.

The deceleration in CPI inflation will nudge the Reserve Bank of India (RBI) to hold off on hiking key repo rates as it sounded hawkish at the Monetary Policy Committee (MPC) meeting last month.

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