India’s IIP Growth Dampened To 12.3% In June, Led By Normalising Base: ICRA


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The normalising base resulted in a fairly broad-based dampening of the YoY growth in the Index of Industrial Production to 12.3% in June 2022 from 19.6% in May 2022, as anticipated.

Nevertheless, the pace of industrial growth in June 2022 was appreciably higher than our forecast of 10.2%, led by the manufacturing sector. On a sequential basis, the industrial output was flat in June 2022 (up 0.1%), relative to the previous month, with a month-on-month dip in the output of mining and electricity.

The IIP was 6.7% higher in June 2022, relative to June 2019, with the output of capital goods, consumer durables and consumer non-durables exceeding their respective pre-Covid levels for the first time in the current fiscal year.

However, consumption demand remains tentative amid a shift in preferences towards the consumption of services, aided by pent up demand and a normalisation of behaviours.

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