IIP Contracts and Retail Inflation increases bad news for Indian Economy

India-s industrial output, measured by Index of Industrial Production, contracted by 3.2% in November compared to 9.8% growth in the previous month of October. Manufacturing output contracted by 4.4% in November compared to the same month previous year while capital goods output contracted by 24.4%. These contraction in output pulled overall IIP numbers down.

At the same time, retail inflation, measured by the consumer price index, increased for the fifth straight month in December due to rising food prices. Retail Inflation jumped to 5.61% in December compared to 5.41% in November. Retail food inflation in December stood at 6.40% which was higher than 6.07% in November. Negative IIP growth along with higher retail inflation is definitely a bad news for Indian economy.