From a financial standpoint, the two good news have come together. In fact, retail inflation has been softened by lower food prices, but industrial production has increased.
What is Retail Inflation? Retail inflation fell to 5.59 per cent in July.
Inflation based on the Consumer Price Index (CPI) was 6.26 per cent in June a month ago and 6.73 per cent in July a year ago. According to data from the National Statistics Office (NSO), food inflation fell to 3.96% in July from 5.15 in the previous month.
Here is the RBI’s estimate: In its monetary policy review released earlier this month, the Reserve Bank of India estimates the Consumer Price Index inflation to be 5.7 per cent in 2021-22. According to the RBI, inflation remains at 5.9 per cent in Q2, 5.3 per cent in Q3 and 5.8 per cent in Q4, with the risk of fluctuations in inflation. It is estimated to be 5.1 per cent in the first quarter of the next fiscal year 2022-23.
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Growth in Industrial Production: Industrial output grew 13.6 per cent in June 2021 compared to the same month a year ago. According to the data, the manufacturing sector grew by 13 percent in June 2021. Mine production increased by 23.1% and electricity generation by 8.3%. In June last year, IIP fell by 16.6 per cent. In the April-June quarter of the current fiscal, IIP saw a growth of 45 per cent, down 35.6 per cent over the same quarter last year.