India’s IIP growth accelerated to an 8-month high of 7.1% YoY in Apr-22 from 2.2% in Mar-22.
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Jun 10, 2022
Apr-22 IIP - The investment-consumption divide
India’s IIP growth accelerated to an 8-month high of 7.1% YoY in Apr-22 from 2.2% in Mar-22. Although a favorable statistical base buoyed the annualized growth print, the positive surprise is substantial while the seasonally adjusted momentum appears relatively strong. Having said so, we note that much of the heavy lifting in Apr-22 as well as in the recent past has been done by investment-oriented goods while consumption-oriented goods have struggled. Going forward, we believe momentum in FY23 IIP could moderate as base effect normalizes while a slowing global demand and a rising interest rate environment weighs somewhat.