Inflation hits 5.55%, IIP soars

India’s retail inflation, as per the Consumer Price Index (CPI), reached 5.55% in November 2023, exceeding the RBI’s 4% medium-term target but remaining within the 2-6% tolerance limit. The latest official data revealed a rise from October’s 4.87%, the lowest in five months. Food prices notably increased by 8.7% in November compared to 6.61% in October and 4.67% in November 2022.

Simultaneously, India’s Index of Industrial Production (IIP) exhibited robust growth, hitting a 16-month high of 11.7% in October 2023. This surge was attributed to strong performances in manufacturing, mining, and electricity sectors. The manufacturing sector recorded a 10.4% growth, mining production rose by 13.1%, and power output increased by 20.4% during the same period. The IIP’s overall growth for April-October 2023 was 6.9%, compared to 5.3% in the corresponding period the previous year.

The Reserve Bank of India, entrusted with maintaining retail inflation at 4% with a 2% margin on either side, had projected a CPI inflation of 5.4% for 2023-24 in its recent monetary policy announcement. This included a forecast of 5.6% in the third quarter and 5.2% in the last quarter.

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