MUMBAI, Dec. 12 (Xinhua) -- Indian economy faced twin shocks on Thursday with retail inflation for November rising to a three-year high at 5.54 percent while Index of Industrial Production (IIP) contracting by 3.8 percent in October, official data said.
Consumer inflation spiked in November on the back of costlier food items, compared to 4.62 percent in the preceding month of October while the dip in industrial production was mainly due to poor performance by power, mining and manufacturing sectors.
Last week, India’s Central Bank left interest rates unchanged as the inflation rate had gone beyond its comfort zone and Thursday’s number may continue to keep the rates unchanged at the next policy meeting, an analyst with the domestic brokerage said.
Meanwhile, IIP for the month of October 2019 stood at 127.7, which is 3.8 percent lower as compared to the level in the month of October 2018. The cumulative growth of IIP for the period April-October 2019 over the corresponding period of the previous year stands at 0.5 percent, said the statement by the country’s Ministry of Statistics & Program Implementation.
Manufacturing sector growth declined by 2.1 percent in October as compared to 8.2 percent growth a year ago while Power generation dipped sharply by 12.2 percent in October, compared to 10.8 percent growth in the year-ago period. Mining output too fell by 8 percent in the month under review as against 7.3 percent growth in the corresponding period last fiscal, as per the data released.
Asia’s third largest economy had grown at the slowest pace in six years to 4.5 percent in the July-September quarter and it is expected to grow at 4.3 percent in October-December quarter this year amid concerns over crisis in the parallel banking sector, according to Nomura report released earlier today.
The Japanese Financial Services firm also believes that the first quarter of Jan-Mar 2020 will see a weak uptick in India’s GDP at 4.7 percent.
