Informist Poll
India Aug IIP growth seen at 22-month low of 1.0%
This story was originally published at 16:51 IST on 10 October 2024
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By Shubham Rana
NEW DELHI – India's industrial output likely grew by just 1.0% in August, according to the median of estimates of 16 economists polled by Informist. At 1.0%, the predicted industrial growth would be the lowest in 22 months, although this would be due to an unfavourable base effect, economists said.
Industrial output, as measured by the Index of Industrial Production, had risen by 4.8% in July and 10.9% in August 2023. The National Statistical Office will release Index of Industrial Production data for August at 1730 IST on Friday.
A 1.0% growth in industrial production in August would mean a 1.5% month-on-month fall in the IIP. This decline would be far greater than the average 0.3% sequential fall seen in August over the last 12 years. If the overall index of the IIP remains unchanged in August from July, industrial growth would come in at 2.6%.
However, IIP growth in August is also seen lower due to weakness in industrial activity, as indicated by the latest core sector data, Kaushik Das, Deutsche Bank’s chief economist for India, said in a note. Data released on Sept. 30 showed the output of India's eight core industries, which account for over 40% of the total weight of the IIP, contracted 1.8% on year in August, the worst performance in 42 months.
"A slowdown in growth momentum is visible beyond core infrastructure and industrial production as well," Deutsche Bank's Das said.
Other high-frequency data to show weakness in momentum include the manufacturing Purchasing Managers' Index, which fell to 57.5 in August from 58.1 in July. Meanwhile, merchandise exports contracted 9.3% on year the same month compared with a fall of 1.8% in July. Vehicle production growth also decreased sharply to 4.4% from 16.8% in July.
"Going forward, IIP growth is likely to be contingent on rural demand pick up, festive season effects, along with global growth trends," Kanika Pasricha, chief economic advisor of Union Bank of India, said in a note.
The following is the summary of the poll on IIP growth in August:
Range of expectations: (-)1.5-3.5%
Mean: 0.8%
Median: 1.0%
Mode: 1.0%
|
ORGANISATION |
IIP GROWTH ESTIMATE |
|
Moody's Analytics |
(-)1.5% |
|
Deutsche Bank |
(-)1.2% |
|
India Ratings and Research |
(-)1.0% |
|
YES Bank |
(-)0.8% |
|
Nirmal Bang Institutional Equities |
0.2% |
|
Union Bank of India |
0.4% |
|
Bank of Baroda |
0.5% |
|
ICICI Securities Primary Dealership |
1.0% |
|
ICRA |
1.0% |
|
State Bank Of India |
1.1% |
|
CareEdge Ratings |
1.21% |
|
QuantEco Research |
1.6% |
|
Sunidhi Securities |
1.85% |
| HDFC Bank | 2.1% |
|
STCI Primary Dealer |
2.8% |
|
Acuite Ratings and Research |
3.5% |
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Akul Nishant Akhoury
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