Data issued by Central Statistical Organisation (CSO) shows retail inflation accelerated to a four-month high of 2.57% in February from a revised 1.97% a month ago, while factory output slowed to 1.7% in January from 2.5% in the previous month.
India’s retail inflation quickened in February but remained within the central bank’s comfort zone, while factory output weakened in January, leaving enough space for the Reserve Bank of India (RBI) to cut its repo rate on 5 April for the second straight time this year.
Though deflation in vegetables, pulses and sugar is waning slowly, pushing up retail inflation, core inflation softened to 5.55% in February from its peak of 6.13% in June last year. Among use-based groups in the Index of Industrial Production (IIP), output of capital goods contracted, suggesting weak investment demand. Electricity output growth slowed to a 43-month low of 0.8% in January.