IIP growth at 2.4 per cent, inflation dips

India’s Industrial production growth for the month of December 2018 came in at better-than-expected 2.4 per cent, up from 0.3 per cent in November 2018. The IIP growth for the period of April-December 2018 stood at 4.6 per cent.

The government’s frontloading of capital expenditure programs particularly on railways and roads resulted in the infrastructure/construction industry growing 10.1 per cent. Consumer durables and consumer non-durables registered growth of 2.9 per cent and 5.3 per cent, respectively.

The electricity, manufacturing and mining growth rates came in at  4.4 per cent, 2.7 per cent and -1 per cent for December 2018, as against 6.4 per cent, 4.7 per cent and 3.1 per cent, respectively for December 2017.

Under manufacturing, the highest growth was reported by the industry group tobacco products at 27.9 per cent, followed by other transport equipment 17.9 per cent and wearing apparel 16.5 per cent for December 2018. The highest degrowth was witnessed in the furniture segment which was down 18.7 per cent.

The primary goods, capital goods and intermediate goods segments reported degrowth of 1.2 per cent, 5.9 per cent and 1.5 per cent, respectively.

CPI inflation came in at 2.1 per cent, the lowest since June 2017, aided by the continued fall in foods prices. Vegetables, sugar and pulses have witnessed continue to witness negative price growth.

Non-food inflation has managed to remain in excess of 5 per cent but has been coming down gradually on the back of lower fuel prices due to a reduction in crude oil prices.