Retail inflation up

Retail inflation inched up for the third successive month in October on the back of creeping prices of some food items, while industrial output growth slowed in September posing fresh challenges for policy makers trying to revive growth.
Data released showed the consumer price index rose an annual 5% in October compared to 4.41% in September. In rural areas retail inflation was 5.54% in October, while in urban segments it was 4.28%.
Prices of some food items such as pulses soared. The overall consumer food price index rose 5.25% in October compared with 3.88% in September. Price of pulses rose 42.2% in October, underscoring the need to tackle the problem through a medium-term strategy . The government has taken several steps, including a crackdown on hoarders, to ensure that the popular protein is available for the masses at affordable rates.
Economists said RBI is expected to keep a close watch on the inflation trajectory and may prefer to wait and watch for its next move on easing interest rates.
Separate data released by the CSO showed the index of industrial production rose an annual 3.6% in September, slower than 6.3% recorded in August but slightly higher than 2.6% in September last year.Slower than expected growth in manufacturing and a sluggish mining sector weighed on growth, while electricity powered ahead with an expansion of 11.4% in September compared to 3.9% rise in the same month last year. Overall industrial output growth during April-September was at 4% compared to 2.9% during the same period in 2014.
The manufacturing sector grew 2.6% compared to an expansion of 2.7% in September 2014. The capital goods sector, which is a gauge of industrial activity, continued to remain robust, rising 10.5% in September compared to a growth of 12.5% in year earlier month.
The consumer segment, which had displayed signs of a revival in August, posted sluggish numbers. Consumer durables led the pack with a robust expansion of 8.4% in September compared to a contraction of 11.1% in September 2014. Consumer non-durables fell 4.9% in September compared to 1.3% growth in the year earlier month, while consumer goods remained sluggish, rising 0.6% year-on-year in September compared to a contraction of 4% in September 2014. The faster-than-expected growth in August had triggered hopes a sharp rebound in the industrial sector.India Inc said it expects growth to gather momentum in the third quarter.

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