A cooling economy

Data shows RBI has room for a much-needed rate cut

Official data released on Wednesday reinforced concerns that the Indian economy was slowing. The growth of index of industrial production (IIP) slowed to 1.7 per cent, year-on-year (y-o-y), the lowest in three months. Electricity generation, at 8.7 per cent, y-o-y, pushed up aggregate IIP growth; manufacturing output itself was up only 1.2 per cent, y-o-y, in May 2017, as compared to 2.3 per cent in April. The cooling of the economy was visible also in the data for consumer price index (CPI) in June 2017, which hit a new low of 1.5 per cent, down from 2.2 per cent in