(MENAFN- AFP) India's consumer inflation rose slightly last month while industrial production growth slowed in December, according to new figures released Thursday, days after the country sharply raised its annual growth forecast.
India on Monday predicted its economy would grow by 7.4 percent this financial year up to March, a marked improvement on earlier estimates issued under a revised formula for calculating gross domestic product.
Analysts however said Thursday's figures indicated Indian industry was struggling to regain momentum after a long economic slowdown.
Production by India's factories, mines and utilities grew by 1.7 percent in December, just less than half the 3.8-percent growth recorded in November.
Prime Minister Narendra Modi came to power in May last year promising to reignite flagging growth and create much-needed jobs.
But he has struggled to push key economic reforms through parliament, and his party this week suffered its first major electoral setback in Delhi state polls.
Despite the continued slump in global crude oil prices, consumer inflation rose to 5.11 percent year-on-year in January, up slightly from 5.0 percent in December.
The Reserve Bank of India (RBI) has been under pressure from the government and markets to cut high interest rates to boost economic growth, but governor Raghuram Rajan has insisted on first winning the battle against inflation.
Shilan Shah, an economist at London-based Capital Economics said the January figure was still comfortably below the RBI's inflation target of 5.5 percent.
"In all, today's data point to increasing slack in the economy," said Shah.
"As such, while the revised GDP data suggest that the economy is growing much faster than previously thought, the case for further policy loosening remains intact."
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