Growth in India’s industrial production rose to 5.7% in Feb-24 from 4.1% in Jan-24 (revised higher from 3.8% reported earlier).
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Growth in India’s industrial production rose to 5.7% in Feb-24 from 4.1% in Jan-24 (revised higher from 3.8% reported earlier). The upside in Feb-24 IIP growth can be attributed to an extra day of production in the leap year, as it also reinforces the higher than anticipated strength in economic activity seen in Q4 FY24. Heading into FY25, diverging trends would determine the trajectory of industrial activity – support from government capex, recovery in rural consumption amidst anticipation of normal monsoon, headwinds to urban consumption strength, extent of global growth resilience amidst recent upside in crude oil prices and the waning of support from price deflator as WPI moves into positive territory. We see an upside risk to NSO’s Q4 FY24 GDP growth estimate of 5.9%, which in turn would impart 20 bps upside to the full year (FY24) GDP growth estimate of 7.6%, with GVA at 7.1%. For FY25, we anticipate GDP growth to slow down (by 100 bps) to 6.8%, but downside in GVA to be contained at 50 bps.