India July CPI Inflation Rate, June 2022 IIP Growth Rate: India’s retail inflation, measured by the consumer price index (CPI), fell to a 5-month low 6.71 percent in the month of July, against 7.01 percent in June. Separately, Indian factory output, as measured by the Index of Industrial Production (IIP), witnessed a growth of 12.3 percent in June, two separate data released by the Ministry of Statistics and Program Implementation (MoSPI) on Friday showed.
Despite falling to its lowest level since February 2022, the CPI remains above the Reserve Bank of India’s (RBI) top margin of 6 percent for the seventh straight month. The government has instructed the central bank to keep retail inflation at 4 percent with a 2 percent margin on both sides for a five-year period ending in March 2026.
The CPI data is mainly taken into account by the RBI when making its bimonthly monetary policy. In an effort to control raging inflation, the central bank’s Monetary Policy Committee (MPC) last week increased the repo rate by 50 basis points (bps) to 5.40 percent.
Announcing the decisions of the MPC meeting last week, RBI Governor Shaktikanta Das had said that retail inflation remains uncomfortably high and noted that inflation is expected to remain above 6 percent. He said the central bank’s inflation forecast remains at 6.7 percent in 2022-23, with Q2 at 7.1 percent; Q3 at 6.4 percent; and Q4 at 5.8 percent, and the risks are well balanced.
The Consumer Food Price Index (CFPI) or food basket inflation also showed a month-on-month decline in July to 6.75 percentfrom 7.75 percent in June, the data shows.
Vegetable prices rose by 10.90 percent year-on-year in July. This aside, spices saw an increase of 12.89 percent, while grains and produce rose 6.90 percent and oils and fats rose 7.52 percent. Egg prices fell by (-)3.84 percent, but the fruit grew by 6.41 percent.
Excluding food and beverages, the fuel and light segment grew by 11.76 percent, clothing and footwear by 9.91 percent and the residential segment by 3.90 percent.
Industrial output (IIP)
India’s factory output, measured in terms of IIP, grew by 12.3 percent year-on-year to 137.9 in the month of June, separate data released by the MoSPI show.
The IIP was up 13.8 percent by June 2021, the data showed.
Industrial growth so far in fiscal year 2022-23 (April-June) is up 12.7 percent, compared to contracting from its peak of 44.4 percent in the corresponding period a year ago, the report shows. data.
The June IIP data growth was led by the manufacturing and electricity sectors. The electricity sector rose 16.4 percent year-on-year to 196.9 in June. This was followed by the manufacturing industry, which grew by 12.5 percent to 136.3. The mining sector saw growth of 7.5 percent to 113.4, MoSPI data shows.
In June last year there was an increase of 13.2 percent in the manufacturing industry. In the same month, the mining sector was up 23.1 percent, while the electricity sector had grown 8.3 percent, the data shows.