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IIP grows by 11.5% in Jul

Indian industrial production (IIP) grew by 11.5% in the month of Jul as compared to 13.6% in Jun as the effect of favorable base softened.  Meanwhile, as expected, factory output revived 7.2% MoM in Aug (5.7% in Jul) indicating uptick in economic activity with easing of economic restrictions. While industrial production witnessed significant sequential recovery, IIP index still remained below the pre-pandemic level at 131.4 in Jul’2021 v/s 131.8 in Jul’2019. Manufacturing grew by 10.5% in Jul  (13% in Jun) on yearly basis, while manufacturing picked up by 8.2% MoM in Jul thereby reflecting sequential improvement in manufacturing scenario. Out of 23 industry group, 20 industries reported positive growth during the reported month. Mining grew by 19.5% and electricity by 11.1% in Jul. On use based classification, capital good grew by 29.5% and infrastructure at 11.6%. Consumer durables grew by 20.2% while non-durables de-grew by -1.8% during Jul due to unfavorable base effect unlike other sectors.

Inflation eases to 4-month low at 5.3% in Aug

CPI inflation eased to 4-month low at 5.3% in Aug due to sharp decline in food inflation. CFPI declined to 3.1% in the month of Aug (4.0% in Jul) due to deflation in vegetables, cereals & sugar and reduction in fruit prices. Vegetables prices declined by -11.7% in Aug (-7.8% in Jul), cereals at -1.4% (-1.7% in Jul), sugar at -0.6% (-0.5% in Jul) and fruits at 6.7% (9% in Jul). Meanwhile inflation in some food items such as pulses (8.8% in Aug) and protein items at 9.2% remained sticky. Fuel & power inflation rose to 12.95% in Aug from 12.4% in Jul due to high fuel prices in India (petrol at 24.0% and diesel at 22.1% in Aug). Core inflation, which is non-food and non-fuel, eased to 5.5% in Aug from 5.7% in the previous month.