India's industrial growth recovers to 1.2% in May; June inflation at 5.77%

Zee Media Bureau

New Delhi: India's industrial production grew by 1.2 percent in May compared to (-) 0.8 percent in April.

Factory output measured in terms of Index of Industrial Production (IIP) was 2.5 percent in May last year, as per data released by Central Statistics Office (CSO) today.

The cumulative growth for the period April-May 2016 over the corresponding period of the previous year stood at (-) 0.1 percent. The manufacturing sector, which accounts for over 75 percent of the index,  grew by 0.7 percent in May against a growth of 2.1 percent in same month a year ago.

The retail inflation based on Consumer Price Index (CPI) rose to 5.77 percent in June as against 5.76 percent in May. Food inflation was 7.79 percent last month, higher than a revised 7.47 percent in May.

The Aug 9 policy meeting will be the last for RBI Governor Raghuram Rajan, whose three-year term ends in early September. Between January 2015 and this April, he cut the repo rate by 150 basis points, to 6.50 percent.

After holding rates in June, Raghuram Rajan said the central bank was looking for room to reduce them further, but it remained concerned about pressure on food and commodity prices.