Growth in India’s industrial production surged to 19.6%YoY in May-22 compared to 6.7% in Apr-22 (revised lower from 7.1%).
Download ReportMay-22 IIP - Bounces on base
Growth in India’s industrial production surged to 19.6%YoY in May-22 compared to 6.7% in Apr-22 (revised lower from 7.1%). This marked the highest pace of growth in last 1 year, supported yet again by a favourable statistical base owing to the Delta wave of COVID concentrated in the months of April and May last year. Sequentially, though the index moved up by 2.3%MoM – it fared much lower than historical momentum of 5.5% usually seen in the month of May (ex-pandemic years 2020 and 2021). Looking ahead, the slowing trajectory of global growth (with some impact on domestic exports) along with elevated inflation could have a bearing on demand and in turn production momentum. Having flagged downside risks to manufacturing, it would be appropriate to balance our view by highlighting support to growth expected from anticipated normal monsoon, capex focused fiscal policy and outperformance of services. As such, we maintain our FY23 GDP growth estimate of 7.0%.