NEW DELHI: India’s industrial production growth fell to 3.7% in June, from 5.3% in May. Mint explains why.
NEW DELHI: India’s industrial production growth fell to 3.7% in June, from 5.3% in May. Mint explains why.
Why did industrial production growth fall in June?
Growth fell during June mainly due to weaker growth in manufacturing. Growth in the manufacturing sector, at 3.1%, reduced the overall growth rate after 14 of the 23 sectors in the manufacturing sector registered negative growth. Those that did not have a significant performance were food, textile products and electronic products, among others.
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Why did industrial production growth fall in June?
Growth fell during June mainly due to weaker growth in manufacturing. Growth in the manufacturing sector, at 3.1%, reduced the overall growth rate after 14 of the 23 sectors in the manufacturing sector registered negative growth. Those that did not have a significant performance were food, textile products and electronic products, among others.
What were the projections for June industrial production growth?
IIP growth was below the projections made by Bank of Baroda economists, who pegged it at 5.5% during June. Analysts in a Reuters poll had forecast a 5% expansion. Meanwhile, industrial production for May was revised to 5.3% from 5.2%.
Looking ahead, what are the prospects for the Indian economy?
With risks to global growth on the downside, economists expect weak external demand to persist. Domestically, a lasting recovery in demand remains important for industrial activity, according to Care Ratings Ltd. Domestic demand is also facing headwinds from a rebound in inflation fueled by accelerating food prices. Weather-related uncertainties could also be a spoiler for the recovery in rural demand.
What are the expectations for the growth of industrial production in July?
Year-on-year (year-over-year) performance of most available high-frequency indicators such as gasoline and diesel sales, GST e-invoice generation, Coal India Limited production, cargo traffic at major ports, rail freight traffic and electricity generation. improved in July 2023 relative to June 2023, said Aditi Nayar, chief economist at Icra Ltd. “In contrast, year-on-year growth in vehicle registrations and finished steel consumption deteriorated in July 2023, relative to the previous month, although it remained in double digits. Based on these trends, ICRA expects IIP growth year-on-year to pick up to around 4-6% in July 2023,” added Nayar.
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