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  • Quote by Aditi Nayar, Chief Economist, Head – Research & Outreach, ICRA Ltd. on IIP Data

    Published on November 11, 2023

    “An unfavorable base, a shift in the festive calendar and excess rainfall caused the year-on-year (YoY) growth in the Index of Industrial Production (IIP) to nearly halve to a lower-than-expected 5.8% in September 2023 (ICRA’s exp.: +8.0%) from 10.3% in August 2023. While the moderation was broad-based across all sub-sectors and use-based categories, the performance of consumer goods was especially tepid at +1.0% and +2.7%, respectively, for durables and non-durables, resulting in the manufacturing sector’s performance trailing that of mining and electricity in September 2023. 
    Looking ahead, the YoY performance of a majority of the available high frequency indicators improved in October 2023, relative to September 2023. Consequently, ICRA expects the YoY IIP growth to improve to 7-10% in that month, boosted by a favourable base for some sectors owing to the early onset of festive season in 2022 and the relatively fewer working days in October 2022. However, we expect fewer working days to dampen IIP growth in November 2023.
    The shift in the festive calendar is likely to muddy YoY comparisons for the next two months as well. Consequently, it would be more meaningful to compare the average YoY growth performance in Oct-Nov 2023 vis-à-vis Oct-Nov 2022.”


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