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Inflation soars to 8-month high in September; August IIP in negative zone

Consumer inflation in September increased to 7.34% from 6.69 per cent in the previous month on account of rising food prices . This marks the highest level recorded in past eight months, and well above the RBI ‘s target range of 2-6 per cent. Food inflation in September rose to 10.68% compared to 9.05% in August.Another key barometer of the economy, Industrial production, declined by 8 per cent in August, mainly due to lower output of manufacturing, mining and power generation sectors. The IIP had contracted by 1.4 per cent in August 2019.According to the data, manufacturing sector production registered a decline of 8.6 per cent, while the output of mining and power segments fell 9.8 per cent and 1.8 per cent.Persistent high prices has hurt Indian economy, which contracted a record 23.9% in April-June despite the Reserve Bank of India cutting its key repo rate by a cumulative 115 basis points since the pandemic started. The MPC in its last meeting decided to keep its key interest unchanged and has maintained an accommodative stance.Although the government has eased some lockdown restrictions to help the economy, supply chain disruptions have shown little sign of abating as the virus continues to spread rapidly in India. Read from source….