Factory output up 7.5%, capital goods 14.6% in Jan

Retail inflation falls Feb, industrial output increases in Jan

Retail inflation falls Feb, industrial output increases in Jan

Meanwhile, the Index of Industrial Production rose 7.5 per cent in January, led by robust expansion in the manufacturing sector.

On the other hand, the cumulative growth in these three sectors during April - January 2017-18 over the corresponding period of 2016 - 17 has been 2.5 percent, 4.3 percent and 5.3 percent respectively.

The release added, "The all items index rose 2.2 percent for the 12 months ending February, a slightly larger increase than the 2.1-percent rise for the 12 months ending January".

Prices for women's and girls' apparel increased 1.5% in February, while men's and boys' clothing prices were up 1.7%.

Tuesday, the U.S. Labor Department said its U.S. Consumer Price Index rose 0.2% in February, after increasing 0.5% in January.

"The sharp dip in retail inflation in February has reinforced our expectation that the MPC would keep the repo rate unchanged in the upcoming policy review in April, which may prompt a further easing of bond yields in the immediate term", said Aditi Nayar, Principal Economist, ICRA, warning that inflation may see a spurt in the coming months.

A lower inflation is considered to be an ideal situation for central bank to slash prices to aid industrial and commercial activity.

However, the mining sector saw a flat growth of 0.1 per cent compared with 8.6 per cent a year ago.

Compared to the same month a year ago, consumer prices were up by 2.2% in February, reflecting a modest acceleration from the 2.1% increase in January.

"Solid domestic economic momentum and the impulse from oncoming fiscal stimulus will underpin a gradual build in inflation toward the Fed's 2 percent target", said Gregory Daco, chief economist at Oxford Economics in NY.

"While there is evidence of building inflationary pressures in certain components, the annual growth rates, especially for the core CPI, do not suggest a breakout in inflation yet", said Ben Ayers, senior economist at Nationwide, in Columbus, Ohio.

Commenting on the IIP numbers, industry chamber Assocham described these as signs of "an underlying pick-up in the growth trajectory". "This is the third consecutive month in which factory output has clocked a high single digit growth".

The IIP growth in January this year was mainly on account of an uptick in the manufacturing sector which constitutes 77.63 per cent of the index.

OECD said,"Tax reductions and higher government expenditure reinforce the momentum in domestic demand from strong confidence, solid job creation, past gains in household wealth and the rebound in oil production".

The consumer durables and consumer non-durables have recorded growth of eight percent and 10.5 percent respectively. In February 2017, however, it was 3.65 per cent.

"Looking ahead, we expect that industrial performance would be on a clear up-slope with both consumption and investment picking up pace during the year", CII Director General Chandrajit Banerjee said.

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