India’s industrial production growth moderated to a 5-month low of 4.2% YoY in Jun-24 from 6.2% in May-24.
Download ReportQuantEco Research || Jun-24 IIP - Moderates to a 5-month low
India’s industrial production growth moderated to a 5-month low of 4.2% YoY in Jun-24 from 6.2% in May-24. This could have been exacerbated by the worsening of heatwave conditions and the extended general election season followed by the new government formation in process, which resulted in subdued spending in the economy, esp. government-led spending. Nevertheless, the IIP managed to maintain its annualized growth momentum at 5.1% YoY in Q1 FY25, unchanged vs. Q4 FY24, and modestly better vis-à-vis 4.8% expansion seen in Q1 FY24. Going forward, near-term cyclical support from monsoon revival coupled with long-term gradually paced structural support from government’s focus on job creation should further 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 factor – input price inflation is expected to turn positive in FY25 after being negative in FY24.