India’s industrial production contracted by 0.1% YoY in Aug-24 (posting its first negative print in 22 months) compared to an expansion of 4.7% in Jul-24.
Download ReportQuantEco Research || Aug-24 IIP - Unexpected contraction
India’s industrial production contracted by 0.1% YoY in Aug-24 (posting its first negative print in 22 months) compared to an expansion of 4.7% in Jul-24. The annualized contraction appears to be driven by both an adverse statistical base effect as well as moderation in organic activity. It is possible that heavy rains in the month of Aug-24 (that saw 16% surplus rainfall vis-à-vis the long period average) caused a temporary moderation in the underlying production momentum. This should be reversed next month with kicking in of the festive season and tapering of the rainfall activity. Having said, one needs to keep a cautious eye on the composition of domestic consumption demand (that is yet to show definite signs of recovery) and emerging geopolitical risks on global demand.