3Q Wealth

India’s IIP growth rebounds in November, Retail inflation eases to 5.72% in Dec

Apr 3, 2023 | 2023(January), Blog

January 13, 2023

CPI December

The Consumer Price Index (CPI)-based inflation rate eased to 5.72% in December. It was 5.88% in November, and 6.77% in October 2022.Food inflation, which accounts for about 40% of the inflation basket, came in at 4.19% in December as against 4.67% in the preceding month. This is the third month in a row that CPI inflation has fallen. It is also the second month in a row that it has come in lower than the upper bound of the Reserve Bank of India’s (RBI) 2-6 percent mandate. Aditi Nayar, Chief Economist, ICRA, said: “We expect the core inflation to remain elevated in Q4 FY2023, given the continued pass-through of higher input costs by producers and sustained robust demand for services.”

IIP November

On the other hand, the factory output, measured in terms of the Index of Industrial Production (IIP), jumped 7.1% in November as against 4% in October, according to the government data. Electricity sector recorded the highest production in November, with a growth of 12.7%, followed by mining at 9.7% and manufacturing at 6.1%. For April-November 2022, the country’s industrial output is up 5.5% on a year-on-year basis, down from 7.1% in the first eight months of FY22. Core industries comprise almost 40% of the IIP figure. As per data released by the commerce ministry on Dec 30, 2022, India’s core industries grew 5.4% YoY in Nov 2022 from 3.2% in Nov 2021.