“The growth in India’s industrial production slowed to a six-month low of 2.9% in February. The moderation in mining and manufacturing output more than offset the improvement in electricity output, weighing on the overall growth number.
While output of consumer durable goods rose by 3.8% in February, growth in output of consumer non-durables continued to stay in the negative territory for the third month in a row. Monitoring consumption trends remains crucial due to the ongoing unevenness in the domestic demand landscape. While rural demand has been improving, the lagging urban demand continues to be a cause of concern. Several factors such as robust agricultural production and expectations of a normal monsoon are likely to remain supportive of rural demand. Furthermore, the easing food inflation is a positive for the overall consumption recovery. However, the urban demand scenario must be monitored going forward.
Among other components, output of infrastructure/construction and capital goods continued to record healthy growth, rising by 6.6% and 8.2%, respectively. While public capex is likely to remain supportive, private sector investment is expected to be tepid in the coming quarters on account of global uncertainties.
Going ahead, global uncertainty continues to cast a shadow on both private investment and consumption. However, RBI’s second rate cut and expected moderation in inflationary pressures will provide some support. ’’