India’s Industrial Output Rises 7.1% In December
India’s factory output growth slowed in December after rising at its fastest pace in 19 months in November. Yet, it beat estimates.
The index of industrial production rose 7.1 percent in December over a year ago, according to data from the Ministry of Statistics and Programme Implementation. A Bloomberg poll of economists had expected industrial production to rise by 6 percent. Growth for the month of November was revised higher from 8.4 percent to 8.8 percent.
The base effect can be attributed to demonetisation in the year-ago period when Prime Minister Narendra Modi outlawed 86 percent of the currency in circulation, which disrupted demand.
The December growth showed not only a robust year on year growth but also a strong sequential improvement in the industrial activity, rating agency Crisil said in a note. “The industry seems to be shedding away the weight of GST-related glitches behind and trying to get back lost momentum, as both domestic and global growth surge.”
The use-based classification of industrial output showed that production of primary goods rose at 3.7 percent, while capital goods production increased by 16.4 percent.
Sixteen out of the 23 industry groups in the manufacturing sector showed year-on-year growth in December. Other transport equipment output rose the most, with growth at 38.3 percent, followed by 33.6 percent growth for the pharmaceuticals, medicinal chemical and botanical products group.
Tobacco products’ output declined the most by 28.2 percent in the same period.
Other Key Highlights
- Manufacturing output rose 8.4 percent over the same month last year.
- Electricity generation rose 4.4 percent year-on-year.
- Mining output went up 1.2 percent over last year.
- Infrastructure and construction goods’ output grew 6.7 percent.
Watch this conversation with Soumya Kanti Ghosh, chief economic advisor at SBI on the key economic data released today.