India Factory Output Growth at 4-Month High

India’s industrial production, based on the index of industrial production grew at an annual pace of 7% in June, the highest in four months, benefiting from a low base of last year when manufacturing activity slowed as dealers cut stock and put fresh orders on hold ahead of the goods and services tax rollout.

The index of industrial production rose 7% year-on-year in June, against a 0.3% decline in June last year, preliminary data released on Friday showed, Domain-b reported.

Mining output rose 6.6% compared with a 0.1% growth in June last year. Manufacturing output improved 6.9% compared with a decline of 0.7%. Electricity generation growth stood at 8.5% compared to 2.1% last year.

Nineteen out of the 23 industry groups in the manufacturing sector recorded positive growth in June. Manufacturing of computer, electronic and optical products recorded the highest pace of growth of 44% in June 2018, followed by manufacturing of motor vehicles, trailers and semi-trailers at 20.5%.

Production of primary goods rose 9.3%, while capital goods production increased 9.6%. Output of intermediate goods, which had been acting as a drag on the overall IIP, improved slightly growing at 2.4%.

Production of consumer durables rose 13.1% while that of non- durables grew 0.5% year-on-year. Production in the infrastructure goods sector rose 8.5% in June 2018.

India is a source of growth for the global economy for the next few decades and it could be what China was for the world economy, the IMF said recently, as it suggested the country  take steps towards more structural reforms.

“India now contributes, in purchasing power parity measures, 15% of the growth in the global economy, which is substantial,” Ranil Salgado, International Monetary Fund’s mission chief for India, said.