Informist Poll
High base to drag down Dec IIP growth to 3.9% from 5.2% Nov
This story was originally published at 15:06 IST on 10 February 2025
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By Shubham Rana
NEW DELHI – India's industrial output likely rose 3.9% on year in December after posting an increase of 5.2% in November, with an unfavourable base effect seen as the primary drag, according to a poll of 13 economists by Informist. Industrial output, as measured by the Index of Industrial Production, had increased 4.4% in December 2023.
Economists' estimates for IIP growth in December ranged from 3.35% to 5.0%. The statistics ministry will release IIP data for December at 1600 IST Wednesday.
In December 2023, the general index of the IIP had jumped 7.9% from a month ago, creating an unfavourable base for December 2024. In November, when IIP growth came at a six-month high of 5.2%, the index stood at 148.4, down 1.2% from the previous month. If the general index remained unchanged at 148.4 in December 2024, industrial production would shrink by 2.6%, the worst performance in 26 months.
Typically, there is a strong sequential momentum in December. In the last 12 years, the index has, on average, grown 6.8?tween December and November. The IIP growth of 3.9% in December assumes a sequential growth of 6.6-6.7%. At 6.6-6.7%, this will be the highest sequential rise in nine months.
According to Union Bank of India economists, high-frequency data for December showed a "mixed trend" when viewed on a year-on-year basis.
"While India's merchandise exports contracted by 1.0% in December, merchandise imports were up 4.9%. E-way bills rose on a year-on-year basis in volume terms in December, and toll collections recorded strong growth both in volume and value terms. While overall automobile sales declined in December, passenger vehicle sales recorded sound growth," economists at Union Bank of India said in a note.
The performance of the eight core industries, which is a key lead indicator of the IIP as it accounts for over 40% of the total weight of the index, weakened somewhat in December. After growth of 4.4% in November--the fastest pace in four months--core sector growth slipped to 4.0% in December, as per commerce ministry data released Jan. 31. The fall in core sector growth in December was driven by a high base, even as the overall index rose 6.8% from November.
Although production of infrastructure and construction goods is seen continuing to recover in December due to the pick-up in government capital expenditure towards the end of 2024, cement production increased by just 4.0% as per core sector data, down from 13.5% in November.
Meanwhile, the Purchasing Managers' Index for the manufacturing sector inched lower to 56.4 in December from 56.5 in November. PMI data, it should be noted, is a survey-based, sequential measure of activity.
The following is the summary of the poll on IIP growth in December:
| ORGANISATION | IIP GROWTH ESTIMATE |
| Sunidhi Securities | 3.35% |
| India Ratings and Research | 3.5% |
| Nirmal Bang Institutional Equities | 3.5% |
| Nomura | 3.5% |
| Kotak Mahindra Bank | 3.6% |
| ICRA | 3.8% |
| HDFC Bank | 3.9% |
| Bank of Baroda | 4.0% |
| Moody's Analytics | 4.0% |
| STCI Primary Dealer | 4.0% |
| Union Bank of India | 4.5% |
| CareEdge Ratings | 4.7% |
| Acuite Ratings and Research | 5.0% |
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Saji George Titus
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