CPI inflation eases to 4.59% in December; IIP contracts 1.9% in November – Mint

New Delhi: Consumer Price Index inflation eased to 4.59% in December 2020 as compared to 6.93% in November and 7.35% in December 2019, according to data released by the Ministry of Statistics and Program Implementation on Tuesday. The rise in prices in October had been the sharpest since May 2014 when the inflation peaked to 7.61%. Retail inflation showed signs of easing in December, led by easing prices of some food items.

Food inflation declined to 3.41% in December in 2020, compared to 9.5% in the previous month.

The IIP growth for October has been revised upwards to 4.9 per cent from last month’s provisional estimates of 3.6 per cent., according to data released by the Ministry of Statistics and Programme Implementation on Tuesday.

The contraction in India’s industrial output is due to contraction in mining and manufacturing sectors. The manufacturing sector witnessed contraction of 1.7% as compared to growth of 3% a year ago, while the mining sector saw contraction of 7.3% in November 2020 as against growth of 1.9% in November 2019. Meanwhile, power generation grew 3.5%.

Inflation in India, as measured by the Consumer Price Index (CPI), has continuously been above RBI’s upper tolerance band of 6% for the past eight months until November. To be sure, inflation peaked in October to 7.61% and had fallen to 6.93% in November.

In October 2020, India’s industrial output had risen for the second straight month after six months of contraction.

Industrial production had plunged 18.7 per cent in March last year following the COVID-19 outbreak and remained in the negative zone till August 2020.

With the resumption of economic activities, factory output posted a flat growth of 0.48 per cent in September.

The output of capital goods, which is a barometer of investment, fell by 7.1% in November 2020 as against a contraction of 8.9% earlier.

Consumer durables output fell by 0.7%, compared to 1.4% contraction in November 2019.

Consumer non-durable goods production fell by 0.7 per cent, compared to a growth of 1.1 per cent a year ago.

The IIP for the April-November period has contracted by 15.5%, according to the data. It had registered a flat growth of 0.3% during the same period last fiscal.

As per used-based classification, the indices of IIP stand at 121.3 for primary goods, 84.6 for capital goods, 136.7 for intermediate goods and 135.5 for infrastructure and construction goods for November 2020.

Consumer durables and consumer non-durables stood at 115.9 and 149.1 respectively.

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