Inflation Falls In India, But So Did Factory Output

India’s consumer-price growth eased more than analysts estimated in January and factory output fell in December following an increase in interest rates as central bank Governor Raghuram Rajan fights Asia’s fastest inflation.

The consumer-price index rose 8.79 percent from a year earlier, compared with 9.87 percent in December, the Statistics Ministry said in New Delhi yesterday. The median estimate in a Bloomberg News survey of 37 analysts was 9.2 percent. The latest rate was the lowest since January 2012.

Rajan pledged to fight inflation and preserve the value of the rupee when he boosted borrowing costs last month along with nations from Brazil to Turkey as the U.S. reduced monetary stimulus. Higher rates have taken a toll on consumer demand, with another report yesterday showing industrial output shrank 0.6 percent in December.

Bloomberg

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