- August consumer inflation at highest level recorded since October 2018
- Inflation below RBI's medium term target for 13 months in a row
- Factory output growth at 4.3% in July, as against 2% in previous month
Consumer inflation rose to 3.21 per cent in August from 3.15 per cent in the previous month, government data showed on Thursday. That was lower than economists' estimates but marked the highest level recorded since October 2018. More than 40 economists polled by news agency Reuters had forecast consumer inflation at 3.3 per cent in August. Their forecasts ranged between 3.00-3.50 per cent. Consumer inflation - determined by the Consumer Price Index (CPI) - measures the change in the rate of increase in consumer prices.
Thursday's data also meant consumer inflation came in below the Reserve Bank of India's medium-term target of 4 per cent for the thirteenth month in a row.
That also marked the longest stretch of retail inflation being contained below the target since the introduction of the index in January 2012.
The central bank, which tracks consumer inflation primarily while formulating its monetary policy, has so far this year reduced the repo rate by 110 basis points (1.1 percentage point) in four consecutive bi-monthly reviews. Repo rate is the key interest rate at which it lends short-term funds to commercial banks.
In its policy statement on August 7, the RBI said it sees consumer inflation remaining within its target range over a 12-month horizon. The central bank has projected retail inflation at 3.1 per cent in the second quarter and 3.5-3.7 per cent in the second half of the current financial year.
Separate official data showed industrial production grew 4.3 per cent in July. Factory output or industrial production is gauged by the Index of Industrial Production (IIP). Analysts polled by Reuters had forecast a reading of 2.3 per cent.