India’s industrial production slipped to a negative territory, posting an annualized growth of -4.0% in Oct-22

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Dec 12, 2022

Oct-22 IIP - Feeble as it gets

India’s industrial activity in Oct-22 was uninspiring on several counts – (i) growth slipped to a 26-month low with headline IIP posting negative YoY print in 2 out of last 3 months, (ii) festive season so far failed to provide any cheer, (iii) gains in breadth of post pandemic industrial recovery appears to have dissipated, (iv) while there has been no respite for consumption oriented industries, momentum for export heavy industries is at risk from the impending global slowdown. Having said so, negative aspects of Oct-22 IIP data appear to have got exacerbated by an unfavourable statistical base and lesser number of working days. Going forward, we expect some relief to overall economic growth from pick-up in rabi output, ongoing capex push by the government, and outperformance by India’s services exports. Overall, we continue to maintain our FY23 GDP growth forecast at 6.8% but anticipate percolation of risks to growth in FY24.