February 10, 2023 / 07:58 PM IST
Rahul Bajoria, chief India economist, Barclays, on December IIP numbers:
India’s industrial output remained robust in December, rising by 4.3% y/y, though moderating from the 7.1% growth in November, which came off a low base. In level terms, output was the highest since March 2022. On a rolling basis, though, IP still remains relatively weak.
Surprisingly, manufacturing output increased, though growth still slowed from November (Dec: 2.7% y/y, Nov: 6.1%). The data suggest that India’s manufacturing sector is still stronger than those seen in the rest of Asia, though a very gradual slowdown may start to be visible.
Of note was the sharp 10.4% contraction in consumer durables, partly driven by a high base, but also a sequential slowdown.
On a three-month rolling basis, IP remains relatively weak, in contrast to most high-frequency indicators, which remain generally resilient, despite global headwinds. This outperformance is also visible in PMI indicators, and most services sector indicators continue to hit new highs, especially in level terms.
