Inflation gathers pace, IIP trudges up too: CRISIL
Author: BI Bureau
New Delhi: Inflation based on the consumer price index (CPI) moved up to 4.9 per cent on-year in November compared with 4.5 per cent in October. It was however lower than 6.9 per cent printed in November 2020, said CRISIL, leading global analytics company.
“While the high-base effect from the last year is helping, it is wearing out gradually, and this is contributing to the pick-up in inflation. Rising food and core inflation also pulled the CPI up, while fuel inflation eased as crude prices moderated,” said the agency.
CRISIL has estimated inflation across different income segments using data from the National Sample Survey Organisation (NSSO). In November, the urban poor faced the highest inflation at 5.6 per cent. In contrast, the lowest inflation was faced by rural poor at 4.1 per cent.
According to CRISIL, CPI inflation is expected to average 5.5 per cent this fiscal as compared with 6.2 per cent last year. The high-base effect is playing a key role in keeping headline CPI inflation lower than last year. Non-food inflation is likely to remain under pressure in the coming months as commodity prices remain elevated, and producers passing through high input costs to consumers amid improving demand conditions.
After declining sequentially in the previous two months, industrial activity switched gears and moved up in October with both manufacturing and mining sectors recording higher output. The Index of Industrial Production (IIP) printed at 133.7 in October, up from 128.2 in September. This represents a 3.2 per cent on-year growth in October as compared with September’s 3.3 per cent.
The pick-up, however, remained uneven, pointing towards both supply side bottlenecks, especially shortage of semiconductors, and subdued demand conditions, as reflected in a sequential decline in consumer durables output despite the festive season. High raw material prices, which are getting passed on to end-consumers, are also acting as a deterrent amid a fragile economic recovery. /BI/
