TURNING THE TIDE

INTERNATIONAL AGENCIES' PROJECTIONS OF HIGHER GDP GROWTH HAVE INSTILLED RENEWED CONFIDENCE IN FY24

The country's retail inflation moved southward to a four-month low of 4.87% in October as against 5.02% in the previous month of September.

Retail inflation or Consumer Price Index (CPI)-based inflation in October was below the Reserve Bank of India's upper tolerance band of 4% to 6% for a second consecutive month.

The Reserve Bank's Monetary Policy Committee (MPC) in its October meeting projected CPI inflation at 5.4% for 2023-24, down from the 6.7% in 2022-23.

The Reserve Bank of India (RBI) which is the country's central bank mainly factors in retail inflation while arriving at its bi-monthly monetary policy. It has kept its key lending rate (the repo rate) steady for a fourth consecutive policy meeting and has said that it remains focused on bringing inflation close to the target of 4%.

The repo rate presently stands at 6.50%. Repo rate is the rate at which the central bank of a country (in India, it is the Reserve Bank of India) lends money to commercial banks in the event of any shortfall of funds.

India's Factory Output Growth Declines in September

India's factory output growth declined to a three-month low of 5.8% in September this year from the double-digit 10.34% registered in the previous month of August. The slide has been attributed to slower activities in manufacturing, mining and electricity sectors.

While the growth in August was a 14-month high, factory output moved northward by 6.03% in the previous month of July. The growth in the Index of Industrial Production (IIP) slid during September after two-months of expansion.

Last year in September '22, factory output growth stood at 3.3%.

"The growth rates over the corresponding period of the previous year are to be interpreted considering the unusual circumstances on account of Covid-19 pandemic since March '20," an official statement from the government said.