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Indian Express
4 days ago
- Business
- Indian Express
Retail inflation slows to 2.1% in June, opens room for more RBI rate cuts
India's headline retail inflation rate slowed more than expected to a 77-month low of 2.1 per cent in June from 2.82 per cent in May as food prices fell 1.06 per cent from a year ago, aided by a favourable base effect, data released on Monday by the Ministry of Statistics and Programme Implementation (MoSPI) showed. The fall in inflation based on the Consumer Price Index (CPI) for the eighth consecutive month potentially opens up room for further rate cuts by the Reserve Bank of India (RBI) in the coming months. So far in 2025, the Monetary Policy Committee (MPC) has reduced the policy repo rate by 100 basis points (bps) to 5.5 per cent, although it tightened its stance to 'neutral' in June and said monetary policy is left with 'very limited space to support growth'. However, with CPI inflation extending its run below the RBI's medium-term target of 4 per cent to a fifth consecutive month, economists think average inflation for 2025-26 is likely to be much lower than the central bank's forecast of 3.7 per cent. 'We continue to expect the RBI to pause in the August policy as it watches the monsoon outturn to ascertain durability of food inflation trends. While earlier we were seeing room for a cut in the December policy, the June CPI print has increased the probability of RBI reducing repo rate by 25 bps in the October policy,' Suvodeep Rakshit, Chief Economist at Kotak Institutional Equities, said. Data also released on Monday by the commerce ministry showed wholesale prices fell in June compared to a year ago, with the Wholesale Price Index (WPI) based inflation rate, at -0.13 per cent, dropping into the deflationary zone. This was the first time in 20 months that wholesale inflation had fallen below zero. On the retail price front, June saw food prices fall for the first time since February 2019 on a year-on-year (YoY) basis thanks to a favourable base effect even as prices rose last month on a sequential basis. 'The prices of vegetables were down 19 per cent YoY, the sharpest pace of decline since December 2022. In addition, prices of pulses were down 11.8 per cent YoY in the same period, fastest fall in prices in over seven years. The meat & fish segment also witnessed a fall in prices in June 2025, for the third straight month. Even the cereals inflation was down to a 41-month low of 3.7 per cent due to better production,' Paras Jasrai, Associate Director and Economist, India Ratings and Research, said. On a month-on-month basis, the Consumer Food Price Index was up 1.1 per cent in June, almost double the 0.6 per cent sequential increase seen in the overall CPI. However, economists see headline inflation falling even further. 'Mandi prices so far are suggesting manageable July perishable food price pressures, with July month tracking 1.7-1.8 per cent as of now,' Madhavi Arora, Chief Economist at Emkay Global Financial Services, said. CPI inflation for rural areas has already fallen below 2 per cent – which is the lower bound of the RBI's flexible inflation target of 2-6 per cent – to 1.72 per cent in June from 2.59 per cent in May. Urban retail inflation also declined to 2.56 per cent from 3.12 per cent. Meanwhile, core inflation – or inflation excluding food and fuel, whose prices can be volatile – edged up to 4.4 per cent in June, the highest since September 2023, according to calculations by The Indian Express. While core inflation is seen as an indicator of underlying demand in the economy, its continued rise in 2025 – it stood at 3.6 per cent in December 2024 – has primarily been due to increasing prices of precious metals. Gold inflation, for instance, rose to a 58-month high of 35.98 per cent in June, as per the latest CPI data. A June CPI inflation rate of 2.1 per cent means it averaged 2.7 per cent in April-June, lower than the RBI's forecast of 2.9 per cent. Economists, who were already of the opinion that the Indian central bank's forecast of 3.7 per cent for 2025-26 as a whole was too high, now see it being undershot by an even greater margin. According to Arora of Emkay Global, average CPI inflation in 2025-26 could be 80-100 bps lower than the RBI's forecast. Falling inflation is also expected to raise real wages of households, according to Jasrai of India Ratings, whose calculations suggest that a 100 bps increase in real wages leads to a 106 bps increase in consumption demand. This boosts GDP growth by 60 bps, Jasrai said. Siddharth Upasani is a Deputy Associate Editor with The Indian Express. He reports primarily on data and the economy, looking for trends and changes in the former which paint a picture of the latter. Before The Indian Express, he worked at Moneycontrol and financial newswire Informist (previously called Cogencis). Outside of work, sports, fantasy football, and graphic novels keep him busy. ... Read More
Economic Times
01-07-2025
- Business
- Economic Times
Odisha leads in Q1 private capex
New private sector project announcements in India hit a four-quarter low in the three months ending June, as per CMIE data. Despite this dip in project numbers, total investments more than doubled year-on-year, reaching ₹3.5 lakh crore, with Odisha leading the way. Experts attribute the moderation to tariff uncertainties and subdued domestic demand, impacting capacity expansion plans. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads New Delhi: New project announcements by private sector companies fell to a four-quarter low in the three months ended June, showed data from the Centre for Monitoring Indian Economy (CMIE). Total investments in these projects at ₹3.5 lakh crore, however, more than doubled from Rs 1.4 lakh crore a year earlier, the data states dominated the investments, accounting for 85.7% of the newly-announced projects. Odisha led at Rs 1.4 lakh crore, followed by Andhra Pradesh (₹47,110.7 crore) and Haryana (₹45,934 crore).Experts attributed moderation in investments to prevailing uncertainty around tariffs, and muted domestic demand, both weighing on capacity expansion plans."The unprecedented economic uncertainty due to tariffs and geopolitical reasons appear to have been behind the decline in new project announcements," said Paras Jasrai, associate director at India Ratings and Research (Ind-Ra).India and the US are negotiating a trade agreement, which is expected to be finalised before July Gupta, principal economist at HDFC Bank , noted that a broader and sustainable recovery in domestic consumer demand is essential for driving private capex. "Clarity on external demand is also crucial for sectors with significant export exposure."The drop in new project announcements aligns with a government survey on private sector capex investment intentions released in fiscal year, private capex is expected to reach ₹4.9 lakh crore, declining from ₹6.6 lakh crore in FY25, according to the survey released by the statistics ministry."Private capex is expected to remain subdued going by the survey, though a pick up could occur in the second half of this fiscal year, as domestic demand strengthens from August with the start of the festive season," said Madan Sabnavis, chief economist at Bank of Baroda Government capex rose 54% to ₹2.2 lakh crore in April-May, official data released Monday 324, new private projects announced in the first quarter of FY26 were the lowest since Q1FY23, according to an ET analysis. CMIE tracks projects with capex of Rs 1 crore or sectors, metals and metal products saw the highest value of new project announcements at ₹1.4 lakh crore, followed by electricity (₹63,207.3 crore) and transport services (₹44,893.5 crore).
Time of India
01-07-2025
- Business
- Time of India
Odisha leads in Q1 private capex
New Delhi: New project announcements by private sector companies fell to a four-quarter low in the three months ended June, showed data from the Centre for Monitoring Indian Economy (CMIE). Total investments in these projects at ₹3.5 lakh crore, however, more than doubled from Rs 1.4 lakh crore a year earlier, the data showed. Five states dominated the investments, accounting for 85.7% of the newly-announced projects. Odisha led at Rs 1.4 lakh crore, followed by Andhra Pradesh (₹47,110.7 crore) and Haryana (₹45,934 crore). Experts attributed moderation in investments to prevailing uncertainty around tariffs, and muted domestic demand, both weighing on capacity expansion plans. "The unprecedented economic uncertainty due to tariffs and geopolitical reasons appear to have been behind the decline in new project announcements," said Paras Jasrai, associate director at India Ratings and Research (Ind-Ra). India and the US are negotiating a trade agreement, which is expected to be finalised before July 9. Live Events Sakshi Gupta, principal economist at HDFC Bank , noted that a broader and sustainable recovery in domestic consumer demand is essential for driving private capex. "Clarity on external demand is also crucial for sectors with significant export exposure." The drop in new project announcements aligns with a government survey on private sector capex investment intentions released in April. This fiscal year, private capex is expected to reach ₹4.9 lakh crore, declining from ₹6.6 lakh crore in FY25, according to the survey released by the statistics ministry. "Private capex is expected to remain subdued going by the survey, though a pick up could occur in the second half of this fiscal year, as domestic demand strengthens from August with the start of the festive season," said Madan Sabnavis, chief economist at Bank of Baroda . Government capex rose 54% to ₹2.2 lakh crore in April-May, official data released Monday showed. At 324, new private projects announced in the first quarter of FY26 were the lowest since Q1FY23, according to an ET analysis. CMIE tracks projects with capex of Rs 1 crore or above. Across sectors, metals and metal products saw the highest value of new project announcements at ₹1.4 lakh crore, followed by electricity (₹63,207.3 crore) and transport services (₹44,893.5 crore).
Economic Times
30-06-2025
- Business
- Economic Times
Industrial output growth hits nine-month low in May
Live Events (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel India's industrial output growth slowed to a nine-month low of 1.2% in May, dragged down by a contraction in mining and electricity sectors even as manufacturing remained tepid, official data released on Monday Index of Industrial Production (IIP) had expanded 2.6% in April and 6.2% in May the three major sectors, only manufacturing grew in May-by 2.6%. Mining and electricity output contracted by 0.1% and 5.8%, attributed the slowdown mainly to early monsoon and slow pickup in urban consumption."The early onset of the monsoon doused activity in mining and the demand for electricity, amidst an anaemic growth of manufacturing," said Aditi Nayar, chief economist at ICRA Tepid industrial volume growth in April and May doesn't augur well for industrial gross value added (GVA) growth in the first quarter of FY26, she noted. Industrial GVA growth declined to 6.1% in FY25 from 11.4% in FY24. Official figures for the June quarter will be released in the manufacturing sector, 13 out of the 23 industry groups recorded positive only 11 of these sub-sectors had a higher year-on-year growth than the overall growth in May, illustrating the fractured and paltry industrial growth, noted Paras Jasrai, associate director at India Ratings and Research (Ind-Ra).In terms of use-based classification, three of the six categories recorded a contraction in May - primary goods (1.9%), consumer durables (0.7%), and consumer non-durables (2.4%).Fall in consumer goods production points to "weak goods consumption by households," Jasrai Sengupta, chief economist at IDFC First Bank , said, "The IIP number is confirming that the urban side of the consumption basket is not doing so well."On the upside, capital goods continued to be the top performer, with growth at a 19-month high of 14.1%, followed by infrastructure/construction goods (6.3%), and intermediate goods (3.5%).
Time of India
30-06-2025
- Business
- Time of India
Industrial output growth hits nine-month low in May
India's industrial output growth slowed to a nine-month low of 1.2% in May, dragged down by a contraction in mining and electricity sectors even as manufacturing remained tepid, official data released on Monday showed. The Index of Industrial Production (IIP) had expanded 2.6% in April and 6.2% in May 2024. Among the three major sectors, only manufacturing grew in May-by 2.6%. Mining and electricity output contracted by 0.1% and 5.8%, respectively. Experts attributed the slowdown mainly to early monsoon and slow pickup in urban consumption. Live Events "The early onset of the monsoon doused activity in mining and the demand for electricity, amidst an anaemic growth of manufacturing," said Aditi Nayar, chief economist at ICRA . Tepid industrial volume growth in April and May doesn't augur well for industrial gross value added (GVA) growth in the first quarter of FY26, she noted. Industrial GVA growth declined to 6.1% in FY25 from 11.4% in FY24. Official figures for the June quarter will be released in August. Within the manufacturing sector, 13 out of the 23 industry groups recorded positive growth. However, only 11 of these sub-sectors had a higher year-on-year growth than the overall growth in May, illustrating the fractured and paltry industrial growth, noted Paras Jasrai, associate director at India Ratings and Research (Ind-Ra). In terms of use-based classification, three of the six categories recorded a contraction in May - primary goods (1.9%), consumer durables (0.7%), and consumer non-durables (2.4%). Fall in consumer goods production points to "weak goods consumption by households," Jasrai said. Gaura Sengupta, chief economist at IDFC First Bank , said, "The IIP number is confirming that the urban side of the consumption basket is not doing so well." On the upside, capital goods continued to be the top performer, with growth at a 19-month high of 14.1%, followed by infrastructure/construction goods (6.3%), and intermediate goods (3.5%).
