IIP rises to 4-month high of 7% in June
India’s industrial output, measured by the index of industrial production (IIP), grew at its fastest pace in four months to 7% in June from a year earlier, driven by a pick up in capital goods manufacturing ahead of festive season, government data showed on Friday.
Economists surveyed by Reuters had forecast 5.4% growth in output compared with a revised 3.9% year-on-year increase in May. Manufacturing, which contributes 78% of industrial output, grew 6.9% in June compared with a 2.8% rise in May.
“Excellent numbers of IIP growth for June. IIP rises by 7%. Capital goods growth 9.6%. First quarter IIP growth stands at 5.2% with manufacturing also recording same growth. 19 out of 23 industry groups recorded positive growth with computer and electronics growth at 44%,” economic affairs secretary Subhash Chandra Garg tweeted.
The eight infrastructure sectors that constitute 40.27% of the IIP had accelerated to a seven- month-high of 6.7% in June as cement, refinery products and coal sectors registered double digit growth, data released on August 1 showed.
While cement production may dip during the monsoon months, government spending on infra in coming months will be critical for future growth prospects in the infra sectors.
In the Reserve Bank of India (RBI)’s 82nd round of the Industrial Outlook Survey conducted in April-June quarter showed respondents were less optimistic on demand conditions in the first quarter of 2018-19 than in the fourth quarter of 2017-18, as revealed in their assessment of production, order books, capacity utilisation and exports.
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