Comments
Factory output grew 2 per cent in April, largely aided by a base effect, confirming slowing of momentum in the industrial sector.
This is lower than the revised 3.4 per cent growth for March, as against 2.5 per cent earlier.
Index of Industrial Production had contracted 1.27 per cent in April last year.
RBI may maintain status quo
With consumer price index for May coming at higher than expected 9.31 per cent, there is near consensus among economists that the RBI will not go in for any aggressive policy rate cut on Monday.
The rupee weakness will also add to the dilemma of the policymakers. There is also a school of thought that the RBI may maintain status quo on the policy rate front on Monday.
Sector-wise growth numbers
While mining in April 2013 contracted 3 per cent ( -2.8 per cent in April 2012), the manufacturing sector recorded 2.8 per cent growth (-1.8 per cent).
Electricity output saw a growth of 0.7 per cent in April against 4.6 per cent growth in the same month last year.
As per use-based categorisation, capital goods output grew a modest 1 per cent in April, higher than the 21.5 per cent contraction in the same month last year.
Consumer goods output grew 2.8 per cent in April, lower than 3.7 per cent growth in the same month last year.
Within the consumer goods segment, consumer durables saw a contraction of 8.3 per cent (growth of 5.3 per cent). Consumer non-durables output grew 12.3 per cent in April 2013 against 2.3 per cent growth in the same month last year.
While basic goods output grew 1.3 per cent (1.9 per cent), intermediate goods output grew 2.4 per cent (-1.8 per cent).
R Sivakumar, Head – Fixed Income & Products, Axis AMC, said, “Today's IIP data show the continued weakness in growth. The details suggest continued constraints on the supply side (mining and power output) as well as weakness in demand (consumer durables). The decline in consumer durables of over 8 per cent is consistent with the 12 per cent drop in car sales we saw in May. We need to see lower interest rates as well as an improvement in investment demand to see a real pickup in the manufacturing sector.”
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.