The surge was largely driven by food prices, with the Consumer Food Price Index (CFPI) hitting 10.87%, indicating mounting pressure on household expenses and broader economic implications.
Adding to these concerns is a slowdown in industrial growth, with the Index of Industrial Production (IIP) rising by just 3.1% in September—a considerable drop from the 6.4% growth recorded in the same month a year earlier.
This growth rate represents only a minor recovery from August’s negative 0.1%, signalling potential headwinds for the industrial sector.
Also read: India’s industrial output up 3.1% in September 2024
Nikhil Gupta, Chief Economist at Motilal Oswal Group, highlighted the subdued industrial output during CNBC-TV18’s special coverage, stating, “3.1% IIP implies that IIP growth was only 2.6% in the quarter ending September. Manufacturing sector growth was 3.1%, much lower than above 4% that we have seen in previous quarters.”
He attributed this slowdown to reduced corporate growth and expects Q2 GDP and GVA growth of around 6.2% and 6.4%, which he describes as “much weaker than market and RBI expectations.”
Commenting on inflation, Sakshi Gupta, Vice President & Senior Economist at HDFC Bank, noted, “This inflation print at 6.2% is closer to what we were anticipating at 6.1%. As highlighted, food inflation is the major culprit.”
She anticipates that inflation will moderate in the coming months, expecting a Q3 average of 5.4%, though this remains higher than the RBI’s 4.8% forecast. “For Q4 we are still expecting close to 4.3-4.4% average inflation,” she added.
Also read: India’s CPI inflation spikes to 14-month high of 6.2% in October
On a similar note, Nikhil Gupta pointed out that inflationary pressures are not confined to food alone. “For the last 3-4 months we are seeing inflation picking up. So definitely the RBI would be revising upwards its inflation forecast for not only Q2 but also Q3 and probably the full year,” he observed.
(Edited by : Shoma Bhattacharjee)
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