Financial News: India Consumer Price Inflation Falls; Industrial Output Lo

India Consumer Price Inflation Falls; Industrial Output Logs Slower Growth

08/12/2024 - 09:14:00 (RTTNews)

(RTTNews) - India's inflation eased more than expected in July to a near five-year low on sharp deceleration in food price growth, giving room for the central bank for monetary policy easing.

Consumer price inflation softened to 3.54 percent in July from 5.08 percent in June, the National Statistical Office said Monday. In the same period last year, inflation was 7.44 percent.

Inflation was expected to weaken moderately to 3.65 percent. The rate was the weakest since 2019 and also moved to the lower band of the 2-6 percent target range.

Food inflation fell more markedly to 5.42 percent in July from 9.36 percent in the previous month.

On a monthly basis, consumer prices posted an increase of 1.4 percent.

Last week, the Reserve Bank of India kept its interest rates unchanged for the ninth straight session amid concerns over inflation, mainly food prices. The repo rate is at the current 6.50 percent since February 2023.

The RBI retained its inflation forecast for 2024-25 at 4.5 percent with risks evenly balanced.

Separate data from the statistical office today showed that industrial production grew less than expected in June. Industrial production registered an annual growth of 4.2 percent. Growth was forecast to decelerate to 5.5 percent from revised 6.2 percent in May.

Manufacturing output grew only 2.6 percent after climbing 5.0 percent in May. Meanwhile, mining logged a marked 10.3 percent growth and electricity output moved up 8.6 percent.

In the June quarter, industrial production advanced 5.2 percent from the same period last year.

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