ICICI Securities: Decoding The Surprisingly Positive Growth In Manufacturing In Q2 FY21
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ICICI Securities Report
The Central Statistics Office released gross domestic product numbers for Q2 FY21 on November 27, 2020.
Although the economy slipped into ‘technical recession’ due to negative growth in second consecutive quarter, the contraction in economic activity was much lower than expected (actual: down 7.5%, Reserve Bank of India Nowcasting model: down 8.6%).
Positive growth in manufacturing gross value added during the quarter when relevant high frequency indicators (such as index of industrial production manufacturing) contracted was puzzling.
To gain better understanding of what drove better-than-expected growth in manufacturing GVA, we analysed 1,945 listed manufacturing companies.
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