The FINANCIAL — India said on May 12 that inflation eased and industrial production weakened in recent months, according to Nasdaq.
The country’s consumer inflation rate declined to 4.87% in April from 5.25% a month earlier thanks to a slower rise in food prices, government data showed. The reading was the lowest in five months and in-line with economists’ expectation of 4.90%.
However, industrial output grew at a slower-than-expected rate, underscoring concerns that a recovery in the economy is likely to be gradual at best. Industrial output grew 2.1% year-over-year in March, the weakest in five months and modestly below the 2.8% expansion predicted by economists. It had risen 4.9% in February.
Output of consumer durable products fell, reflecting the hesitation among consumers to spend. Consumer-durables output fell 4.7% from a year earlier in March.
On a brighter note, capital-goods output rose for the fifth month in a row, indicating businesses are scaling up production on hopes of stronger demand as the economy gathers momentum. Capital-goods output rose 7.6% year-over-year in March.
The improved investment sentiment together with easing inflation would help boost prospects for the economy that is expected to have grown 7.4% in the year ended March 31.
Consumer inflation, which is the main measure guiding policy makers in India, has slowed from a peak of over 11% in 2013, as government intervention in local markets to boost food supplies have helped keep their prices in check despite fears of a spike due to damage to crops caused by untimely rains. A sharp decline in oil prices has also helped keep inflation, particularly at the wholesale level, under control.
The government is scheduled to report the wholesale inflation data Thursday. Economists expect wholesale prices to show a fall for the fifth successive month in April.
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