India’s factory output grew at a robust 7.1% in December on the back of high manufacturing production while retail inflation slowed to 5.07% in January as food inflation softened, according to government data released on Monday,Hindustan Times reports.
In November, the index of industrial production (IIP) grew 8.8% and consumer price index (CPI) based inflation rose by 5.21%. Food inflation softened to 4.58% in January from 4.85% a month ago.
The Reserve Bank of India (RBI) on Wednesday kept interest rates unchanged and warned that inflation risks were skewing upwards.
The RBI raised its March quarter CPI inflation forecast to 5.1% and projected an inflation range of 5.1-5.6% in the first half of the next fiscal year.
However, RBI posits a revival in growth—projecting an acceleration in economic growth to 7.2% from a level of 6.6% in the current fiscal year. It premises this on a host of factors including revival in investment demand and strengthening exports.
By opting to hold interest rates despite its concerns about the growing threat of inflation, the central bank has signalled it will do its bit to protect the nascent recovery underway in the economy.
RBI governor Urjit Patel on Saturday defended the tight monetary policy maintained by the central bank, holding that its decisions are forward-looking rather than based on current inflation data.
Delhi-based think tank National Council of Applied Economic Research (NCAER) in its 103rd Round of the Business Expectations Survey (BES) said the NCAER Business Confidence Index (N-BCI) rose 9.1% in January over October 2017 on a quarter-on-quarter (q-o-q) basis, after falling by 12.9% in October 2017.