Food prices skyrocket

Retail inflation rises on costly food; IIP improves to two per cent in September.

New Delhi: Industrial production rose by two per cent in September due to a strong performance by the electricity sector. However, retail inflation based on the consumer price index (CPI) entered double digit at 10.09 per cent in October led by high vegetable prices.

A high inflation and upturn in industrial production means that RBI is unlikely to ease its monetary policy any time soon.

The increase in retail inflation is worrying as recently RBI has started following CPI to formulate its monetary policy stance.

“Both the industrial output and retail inflation prints are disappointing. The uptick in CPI inflation during October 2013 can be attributed to elevated food and CPI inflation.

IIP growth for Septem-ber at a modest two per cent has come in below market expectations due to negative surprise from the manufacturing sector,” said Bhupali Gursale, economist, Angel Broking.

( Source : dc )
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