India’s industrial production growth accelerated sharply to a 14-month high of 10.3% YoY in Aug-23 from 6.0% in Jul-23.
Download ReportQuantEco Research || Aug-23 IIP - An august print, but not without spots
India’s industrial production growth accelerated sharply to a 14-month high of 10.3% YoY in Aug-23 from 6.0% in Jul-23. Internals indicate a strong uptick in seasonally adjusted momentum. The Aug-23 print seems to have found support from a favorable statistical base and poor monsoon outturn, that kept industrial activity chugging along. Overall, while India’s resilience of domestic economy continues to get underscored, we note the persistence of uneven recovery between investment and consumption oriented industrial production, even as external demand continues to drag. Looking ahead, we expect growth in volume of industrial production in FY24 to moderate from its FY23 level of 5.2%. However, there is likely to be some support from decline in input price inflation, relief spending from the government, and the strong FYTD trend of positive surprises/upward revisions to the IIP data prints. This will provide an upside risk to our FY23 GDP growth estimate of 6.0%.