Friday, 20 October, 2017

Factory growth, inflation likely to trend higher, says Morgan Stanley report

Double boost for economy Industrial output growth rebounds inflation cools India's factory output grows sharply at 4.3% in August
Marta Holmes | 13 October, 2017, 00:35

Industrial production, as represented by Index of Industrial Production (IIP) for the month of August 2017 stands at 121.5, which is 4.3 percent higher as compared to the level in the month of August 2016.

Analysts polled by Reuters had expected September's CPI inflation rate would edge up to 3.60 per cent from August's downwardly revised 3.28 per cent. According to preliminary data released by the Central Statistics Office on Thursday, the consumer price index (CPI) increased 3.28 per cent year on year against the August numbers of 3.36 per cent.

RBI pared down its economic growth projection based on gross value added (GVA) to 6.7% for 2017-18 from 7.3% estimated earlier blaming the tepid growth in foodgrains production, adverse impact of implementation of Goods and Services Tax on the industries and weak consumer confidence.

The August mining sector output is at 9.4 per cent against 4.8 per cent in July, while the manufacturing sector output is at 3.1 per cent, against 0.1 per cent in July.

Meanwhile, the July IIP number was revised to 0.94 per cent from 1.2 per cent provisional estimates released last month.

During April 2017-August 2017 period IIP grew at 2.2%, down from 5.9% in the same period in 2016-17.

The August electricity sector output is at 8.3 per cent, against 6.5 per cent in July.

In terms of industries, 10 out of 23 industry groups in the manufacturing sector showed positive growth during August 2017. It is also below the Reserve Bank of India's medium target of 4 per cent.

The data revealed the overall food inflation moderated to 1.25 per cent in September from 1.67 per cent in the previous month.

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