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Economy Jul 13, 2013

Negative IIP and high CPI imply RBI won’t cut interest rates

By Firstbiz Staff

India's industrial production contracted 1.6 percent in May from a year earlieras against an expectation of 1.5 percent growth and retail inflation rate for June rose to 9.87 percent, giving rise to a complex situation for the Reserve Bank of India and government to deal with.

Reuters

Reuters

Manufacturing sector, which constitutes about 76 percent of industrial production, shrank 2.0 percent from a year earlier, the federal statistics office said. Capital goods production, a barometer for investments in the economy, contracted an annual 2.7 percent in May from a year earlier.

Will the RBI take into account the IIP numbers in their next policy review on 30 June? How much will inflation and low factory output impact its policy?

Sourav Majumdar, Editor-in-chief of Entrepreneur magazine discussed with Firstpost the relevance of IIP numbers and how RBI will see it.

Watch the video to know more.

by Firstbiz Staff

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