Industrial output, which remained in the negative zone for the second month, in December shrank 1.3% while retail inflation in January edged up to a 16-month high, prompting the industry to call for urgent policy action in the forthcoming Budget.

According to the data released by the Central Statistics Office (CSO), while factory output continued to fall, primarily because of a decline in production of capital goods and manufactured products, retail inflation rose as a result of costlier food items. Industrial production contracted 1.3% in December, as against a decline of 3.4% in November.

In terms of industries, 10 out of the 22 industry groups in the manufacturing sector showed negative growth in December 2015 compared with the same month of the previous year. The pace of retail price rise in January 2016 is the highest since 6.46% in September 2014. Food inflation quickened to 6.85% in the first month of 2016, the data showed. Retail prices of ‘cereals and products’ inched up by 2.19% in January, from 2.12% in December 2015.