January IIP, February retail inflation plunge sharply

New Delhi: Lower food prices eased India's February 2019 retail inflation to 2.57 per cent, while a sharp decline in manufacturing output slowed industrial production in January to 1.7 per cent, official data showed on Tuesday.

Lower food prices halved India's retail inflation in February to 2.57 per cent, from 4.44 per cent during the corresponding month of last year.

However, on sequential basis, the Consumer Price Index (CPI) in February 2019 (2.57 per cent) was higher than January 2019's retail inflation rate of 1.97 per cent.

Accordingly, the Consumer Food Price Index (CFPI) in the month under review stood at (-) 0.66 per cent from 3.26 per cent in February 2018. The CFPI had deflated by (-)2.24 per cent in January 2019.

Product-wise, prices of milk-based products, egg, meat and fish rose during the month under review on a year-on-year (YoY) basis.

In contrast, deflation in the cost of vegetables and pulses kept food prices subdued.

Prices of milk-based products rose marginally by 0.92 per cent, while egg became dearer by 0.86 per cent, and meat and fish prices recorded a rise of 5.92 per cent.

On a sub-category basis, vegetable prices reduced on YoY basis in January by (-) 7.69 per cent.

The category of "pulses and products" became cheaper by (-) 3.82 per cent and that of "sugar and confectionery" by (-) 6.92 per cent.

On Tuesday, Central Statistics Office (CSO) also released the Index of Industrial Production (IIP) data for the month of January.

The macro-data showed that lower manufacturing sector output massively slowed down India's factory production to 1.7 per cent, from 7.5 per cent reported for the corresponding month of 2018.

Even on a month-on-month basis, the Index of Industrial Production (IIP) declined during the month under review from December 2018 when it stood at 2.60 per cent.

"The cumulative growth for the period April-January 2018-19 over the corresponding period of the previous year stands at 4.4 percent," the Central Statistics Office (CSO) said in a statement on Tuesday.

As per the data, the output rate of the manufacturing sector output growth rate slowed to 1.3 per cent in January from a year-on-year rise of 8.7 per cent.

On a YoY basis, mining production edged-higher by 3.9 per cent and the sub-index of electricity generation iched-up by 0.8 per cent.

Additionally, among the six use-based classification groups, the output of primary goods, which has the highest weightage of 34.04, rose by just 1.4 per cent. On the other hand, the output of intermediate goods, which has the second highest weightage, went down by (-) 3 per cent.

In contrast, output of consumer non-durables rose by 3.8 per cent and that of consumer durables by 1.8 per cent.

In addition, output of infrastructure, or construction goods, increased by 7.9 per cent, whereas the output of capital goods went down by (-) 3.2 per cent.