India’s IIP growth posted a moderate improvement to 1.9% YoY in Mar-22 from 1.5% in Feb-22
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May 12, 2022
Mar-22 IIP - Healthy momentum, but risks emerging
India’s IIP growth posted a moderate improvement to 1.9% YoY in Mar-22 from 1.5% in Feb-22. The accompanying details with respect to sequential momentum and breadth of activity appear encouraging. While capex oriented fiscal policy, a normal monsoon outturn, and opening up of the economy post the Omicron wave will support overall activity in FY23, we see increasing downside risks from tightening of financial conditions and deceleration of global demand. Adverse statistical base effect would further pose challenges for IIP in the near term. On net basis, we now see emergence of a downside risk to our FY23 GDP growth estimate of 7.3%.