India’s industrial production growth rose just a notch to 4.8% YoY in Jul-24 from 4.7% in Jun-24
Download ReportQuantEco Research || Jul-24 IIP - Remains steady
India’s industrial production growth rose just a notch to 4.8% YoY in Jul-24 from 4.7% in Jun-24. The data offers optimism as well as reasons to be skeptical. The headline growth in Jul-24 marks the second consecutive weakness in the seasonally adjusted data series. In addition, reflective of subdued rural demand conditions, consumer non-durables posted their third monthly annualized contraction in FY25. On the other hand, growth in IIP ex consumer non-durables strengthened with capital goods production picking up after a lull. Going forward, near-term cyclical support from monsoon coupled with long-term structural support from government’s focus on job creation should aid recovery. Meanwhile, headwinds from monetary policy and regulatory tightening coupled with geopolitical uncertainty are likely to offset some of the gains. Keep an eye on the swing factors. While the recent correction in commodity prices makes a pick-up in input price inflation less of a concern, it might signal a slowdown in global demand, which could potentially spillover to domestic manufacturing production.