IIP data: India’s industrial output rises 5.6% in February

INTERNATIONAL DESK: India’s industrial output, as measured by the index of Industrial production or IIP, in February rose 5.6% year on year, data from the Ministry of Statistics showed today. For the 11-month period from April 2022 to February 2023, industrial output registered a growth of 5.5%. The January IIP growth was revised to 5.2%.

The data released by the National Statistical Office (NSO) showed that the manufacturing sector’s output increased 5.3% in February 2023. Mining output rose 4.6% and power generation surged 8.2% during the month under review.

And for the 11-month period from April 2022 to February 2023, manufacturing rose 4.9% year on year, mining 5.7% and
electricity surged 10%.

Factory output measured in terms of the Index of Industrial Production (IIP) grew 1.2 per cent in February 2022.

Separate data released today showed India’s annual retail inflation eased to 5.66% in March from 6.44% the previous month. A Reuters poll of 39 economists had forecast an annual inflation rate of 5.80% in March.

“The monetary policy committee has received an endorsement of their decision to pause the rate hike with the March CPI inflation slowing down to 5.66 % in March from 6.44% in February. The RBI’s projection of 5.2% CPI inflation for FY 24 appears to be on track. Core inflation for March, too, has declined to 5.8% from 6.1% in February. This is good news from the market perspective,” said VK Vijayakumar, Chief Investment Strategist at Geojit FInancial Services.

Nish Bhatt, Founder & CEO, Millwood Kane International, said: “The IIP data at 5.6% is a positive development. The manufacturing sector growth at 5.3% indicates the activity in the economy. From now on, the pace of inflation and a good monsoon year will guide the central bank’s action.”

“The CPI has slowed down to a 15-month low to 5.66%. This figure is below the RBI’s target of keeping below the 6% mark. The data vindicates the RBI’s estimate of inflation slowing down as we move ahead in the calendar year 2023. Food inflation, and vegetable prices slowing down helped the final figure in a big way. The core inflation too has fallen below the 6% mark to 5.8% in the month of March. The figure will help the central bank stay on pause for the next few months,” Mr Bhatt said.

The second advance estimates (SAE) released by the National Statistical Office (NSO) on February 28, 2023 placed India’s real gross domestic product (GDP) growth at 7.0 per cent in 2022-23. The Reserve Bank of India recently forecast India’s economy to grow at 6.5% in FY24. (ET)