The retail inflation rate in India has declined to a 17-month low in the month of November whereas factory output grew to an 11-month high on the back of a lower base. According to data released by the Central Statistics Office retail inflation slowed down from 3.38% to 2.33% in November, below the RBI’s Projection.
Index of industrial production (IIP), which measures the factory output grew at a pace of 8.1% in October, as against 4.5% in the last month. The former RBI governor, Urjit Patel, before resigning kept monetary policy unchanged and cut the inflation forecast for the rest of the fiscal in his last monetary policy committee meeting held on 5 December.
The reserve bank had already cut its inflation projection from 3.9-4.5% to 2.7-3.2% for the second half of the current fiscal in the last monetary policy committee (MPC) held this month. However, the RBI expects inflation to quicken to 3.8-4.2% in the first half of the following year.
Gross domestic product (GDP) forecast by the MPC for the current year was retained at 7.4% with risks somewhat to the downside.