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Below On ACM statement on IIP and CPI numbers July-August 2022 By Mr. Anand Varadarajan, Director, Asit C Mehta Financial Services Ltd

"The erratic as well as poor monsoon and negative seasonality in vegetable prices in many parts of India led to India's retail inflation surge to 7 % on an annual basis in August 2022 from 6.71 % in July 2022. The number has remained above RBI’s tolerance band of 2-6 % for the 8th consecutive month. In Aug 2022, food inflation was at 7.62 % against 6.75 % in Jul 2022 primarily due to vegetables which grew by 13.23 %. Rural inflation at 7.15% continued to remain above the urban inflation rate of 6.72% in August. Last month, the rural and urban inflation rates were 6.80% and 6.49%, respectively.

However, the global prices of metals and crude oil have witnessed a sequential decline since mid-June 2022 following the fears of a recession in major economies amid monetary tightening by central banks. This could help to ease some pressure on inflation numbers going forward"

IIP (Jul 2022)

"The continued focus on the Make In India Initiative is driving the steady growth in the manufacturing sector. The Index of Industrial Production (IIP), recorded a growth of 2.4 % in July 2022 against 12.3 % in June 2022.The manufacturing sector, constituting close to 77 %, grew by 3.2 % Jul against 12.5 % in June. The mining sector (which weighs nearly 14 %) contracted by 3.3 %.

As per the use-based classification, the primary goods segment recorded a growth of 2.5 % in July. The other sectors including infrastructure, capital goods, and intermediate goods witnessed an increase of 3.9 %, 5.8 % and 3.6 % respectively.

Consumer durables sector grew by 2.4 %. The non-durable sector contracted by 2 % which shows that there is still pain in the overall consumption segment and people are cutting back on their daily expenses"

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