Etail inflation for uly drops to 5.59%
India’s retail inflaeased to 5.59% in July nst 6.26% a month ago, ging some sense of relief to entral bank. Inflation had ained above 6%--the upper ance level of the Reserve of India--in May and June. ata released by the statistics e showed food inflation d to 3.96% in July even gh inflation for protein s such as egg, oils and fats ained elevated. Fuel inflation d at 12.38% while services tion rose by 6.71% during
India’s factory output eased to 13.6% in June with the base effect beginning to soften. Industrial activity came to a halt in the year-ago period following the nationwide lockdown imposed to limit the spread of the coronavirus pandemic.
Data released by the statistics office showed mining, manufacturing and electricity grew at 23.1%, 13% and 8.3% respectively.
Most economists have suggested looking through the exaggerated growth numbers, which presents a false sense of normalcy even as the rampaging second wave of the pandemic in April forced many states to impose lockdowns, hurting industrial activity.
However, with states easing lockdown restrictions, high frequency indicators signal that a recovery. The finance ministry on Tuesday said the swift rebound in economic indicators since second half of May resonates with the expectation that the impact of the second wave on economic activities will be muted amid visible signs of economic rejuvenation.
“The swift rebound in economic indicators and the muted impact of the second wave is corroborated by upward revision of RBI estimates for real GDP growth in Q1: 2021-22 to 21.4% from its June estimation of 18.5%. The robust recovery in tax collections cushions the fisc towards meeting the budgeted support to the economy,” the Monthly Economic Review for July said.
PMI Manufacturing sharply rebounded to expansionary zone emerging from the previous month’s contraction. GST collection also reclaimed its ₹1 lakh crore plus territory in July signifying increased business and consumer activity.
Rail freight in July hit a record 18.3% growth. The surge in economic activity in July was further corroborated by trends in Kharif sowing, fertilizer sales, power consumption, vehicle registrations, highway toll collections, e-way bills and digital transactions.
Latest data on growth of eight core industries also indicate show an improvement from the contraction due to the pandemic.