India’s consumer price inflation accelerated more-than-expected in September to its highest level in five months, while industrial production declined unexpectedly in August to mark its first contraction in one-and-a-half years, data from the National Statistical Office showed on Wednesday.
Consumer price inflation rose to a five-month high of 7.41 percent in September from 7.00 percent in August. Economists had forecast the rate to increase to 7.30 percent.
In the same period last year, inflation was 4.35 percent.
The inflation rate was well above the Reserve Bank of India’s medium term target of 4.0 percent.
The Reserve Bank of India lifted its benchmark rate for the fourth consecutive time in September to curtail soaring inflation and to stem the decline in the rupee to a record low as the emerging markets encounter spillover effects from the policy normalization in advanced economies.
The central bank projected consumer price inflation at 6.7 percent in the fiscal year 2022-23.
The acceleration of inflation in September was largely driven by a 10.39 percent price growth in fuel and lighting prices, and a 10.17 percent surge in clothing and footwear prices.
Prices for food and non-alcoholic beverages alone grew 8.41 percent annually in September, primarily due to higher prices for vegetables and spices.
Food price inflation stood at 8.60 percent in September, up from 7.62 percent in August.
On a monthly basis, consumer prices moved up 0.57 percent from August, and food prices showed an increase of 0.91 percent.
Separate official data showed that industrial production declined 0.8 percent year-over-year in August, reversing a 2.2 percent rise in July.
Further, this was the first decrease since February 2021.
Among three main sectors, mining output fell the most, by 3.9 percent, followed by a 0.7 percent contraction in manufacturing production. On the other hand, electricity production registered a positive growth of 1.4 percent.
In the April to August period, the industrial production posted an expansion of 7.7 percent annually.
The International Monetary Fund lowered India’s growth forecast for the financial year ending March 31, 2023, by 0.6 points to 6.8 percent, on Tuesday, while the projection for next fiscal was retained at 6.1 percent.
The downgrade reflected a weaker-than-expected outturn in the second quarter and more subdued external demand, the lender said in its latest World Economic Outlook report.
India’s inflation is expected to come in at 6.9 percent this year and 5.1 percent in 2023.
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