India’s Retail inflation is at 3-mth low to 5.1% in Jan, IIP witnessed 3.8% growth in Dec

In January 2024, India’s retail inflation reached a three-month low of 5.1%, while the Index of Industrial Production (IIP) exhibited a growth of 3.8% in December 2023, showcasing a favorable trend in both sectors.

Retail Inflation at 3-Month Low

• Consumer Price Index (CPI) indicates a 5.1% year-on-year (Y-o-Y) retail inflation rate in January 2024, down from 5.69% in December and 6.52% in January last year.
• Notable decline attributed to moderation in prices of cereals, milk, and fruit, while vegetables, pulses, and spices sustain double-digit inflation.
• Protein-rich items like meat and eggs experience slight price acceleration.

Industrial Growth Resilience

• Index of Industrial Production (IIP) grows by 3.8% Y-o-Y in December 2023, up from 2.4% in November, with manufacturing sector leading at 3.9% growth.
• Mining sees 5.1% growth, while electricity lags at 1.2%, down from December 2022’s 5.1% growth.
• Despite some sectors contracting, overall IIP indicates a revival in both urban and rural demand.

Sectoral Performance

• Manufacturing: Majority of industries witness growth, only 11 out of 23 report contraction.
• Use-Based Segment: Sequential moderation observed in primary and intermediate goods, while infrastructure, capital goods, and consumer durables witness acceleration, signaling demand revival in both urban and rural areas.