India’s retail inflation during the month of December was at 5.72 per cent, according to data released by the ministry of statistics on Thursday. The latest figures showed a marginal decline and further moderation in retail inflation as compared with the previous month. India’s retail inflation rate based on Consumer Price Index was 5.88 per cent in November from 6.77 per cent during October. Retail inflation in India had remained above 6 per cent till October for over three quarters, which was beyond RBI’s comfort zone.
India’s industrial production growth rose to a five-month high of 7.1 per cent in November on the back of better showing by manufacturing, according to official data released on Thursday. The rise in the factory output measured by the Index of Industrial Production (IIP) comes after a contraction of 4.2 per cent in October. The previous high was recorded in June 2022 at 12.6 per cent. As per the IIP data released by the National Statistical Office (NSO), the manufacturing sector’s output grew by 6.1 per cent in November 2022. RBI, in its fight against rising inflation, had already hiked the key policy rate by 225 basis points since May to 6.25 per cent to cool off domestic retail inflation that stayed above its upper tolerance limit for nearly three quarters. Raising interest rates typically cools demand in the economy, thereby putting a brake on inflation. The latest hike was on December 7 last year, when the Monetary Policy Committee (MPC) of the RBI increased the policy repo rate by 35 basis points, besides deciding to remain focused on the “withdrawal of accommodation” of monetary policy to ensure that inflation remains within the target going forward, while supporting economic growth.
