Ind-Ra sees retail inflation inching up to 5.6%

0
109

India’s retail inflation in December 2015 is likely to increase to 5.6 percent and industrial production growth rate in November 2015 may fall to 3.1 percent, India Ratings said.

“Ind-Ra estimates index of industrial production (IIP) for November 2015 at 3.1 percent, December 2015 consumer price index (CPI) at 5.6 percent and wholesale price index (WPI) at (-)0.9 percent,” the rating agency said in a statement.

The first set of economic data in 2016 is expected to be released over the next one week.
“A reading of 3.1 percent of IIP will be the weakest in six months and there are a number of factors responsible for industrial growth slowing down,” India Ratings said.

Industrial production in October 2015 stood at 9.8 percent — the highest since November 2010. IIP for November and CPI for December are scheduled to be released on January 12 and WPI is due on January 14.

According to the rating agency, inflation has bottomed out in August 2015. “The period between September 2014 and August 2015 benefited from a favourable base effect, which provided the much-needed comfort in the fight against inflation,” it noted.

“With base effect however waning out since September 2015, both retail and wholesale inflation are inching up.” Despite the uptrend in overall retail inflation since September 2015, it continues to remain within the Reserve Bank of India’s comfort zone.

Retail inflation rose to 5.41 percent in November on a sharp pick-up in food prices. WPI too moved up to (-)1.99 percent as food articles led by pulses and onion turned dearer.

India Ratings said based on the current global economic scenario, crude oil prices are expected to remain benign and are likely to harden in the second half of the current calendar year.

Food prices after the decline are firming up, chiefly due to inflationary pressure from pulses and spices, it noted.

NO COMMENTS