IIP growth seen rising to 5.0% in July from 3.7% June
Informist, Friday, Sep 8, 2023
By Shubham Rana
NEW DELHI - India's industrial growth is likely to have risen to 5.0% on year in July from a three-month low of 3.7% in June, mainly because of a statistical effect of a low base, an Informist poll of 17 economists showed.
Industrial production grew 2.2% in July 2022.
A growth of 5.0% in July will mean a 1.6% sequential decline in the overall index. Typically, industrial production declines month on month in July. In the past 11 years, barring COVID-affected 2020 and 2021, factory output declined 0.2% sequentially in July.
Projections by economists for industrial growth in July ranged from 1.3% to 8.2%.
The National Statistical Office will detail industrial production data for July at 1730 IST on Tuesday.
There is a favourable base for industrial production in July, as growth had dipped to 2.2% on year in July last year, Kaushik Das, chief economist, India and South Asia, Deutsche Bank, said in a report. Das has forecast an industrial growth of 4.3% in July.
Though core sector output growth and manufacturing Purchasing Managers' Index eased marginally in July, they still remained elevated. Growth in e-way bills generation and passenger vehicle production increased during the month.
Growth in India's eight core industries, which account for over 40% of the total weight of the Index of Industrial Production, moderated marginally to 8.0% in July from a five-month high 8.3% a month ago.
On a sequential basis, the overall core sectors' output declined 2.2% in July, with five of the eight industries, falling on a sequential basis during the month.
The manufacturing Purchasing Managers' Index eased marginally to 57.7 in July from 57.8 in June.
On the other hand, passenger vehicle production rose 9.5% on year in July compared with a rise of 2.4% in June. E-way bills, a lead indicator of economic activity and domestic trade, rose 16.4% on year to 87.95 mln in July. The number of bills generated in July was the third-highest ever.
Following is a summary of estimates for IIP growth in July: