New Delhi: The industrial production growth fell to a five-month low of 2.1 per cent in March and retail inflation cooled to a four-month low in April at 4.87 per cent, raising hopes of a rate cut by the RBI next month. Despite the unseasonal rainfall, the prices of vegetables and fruits didn’t shot up significantly as was feared. Vegetables inflation came at 6.6 per cent and fruits at 5.08 per cent in April.
Prices of eggs fell by 1.46 per cent and oil and fats inflation came at 1.77 per cent. However, prices of pulses rose by 12 per cent in April and there are reports that the Centre may import pluses in coming days through state-owned trading firms such as the MMTC to boost domestic supply.
As per the industrial production data, consumer durables growth contracted by 5 per cent and consumer non-durables rose by mere 1.9 per cent. The manufacturing sector grew by 2.2 per cent and mining by 0.9 per cent. As inflation is staying well below RBI’s target range of 6 per cent and growth momentum is weakening, analysts are expecting the RBI to cut interest rates for a third time in June. “The significant dip in April inflation should further tame inflation expectations giving the RBI headroom for another out-of-cycle rate cut before the next policy review on June 2," said Crisil.
