India’s industrial output during April-August period grew by 4.1 percent from an increase of three percent registered in the corresponding period of previous year.
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Furthermore, the factory output in August is the fastest rate of industrial expansion since October 2012, when the data on the Index of Industrial Production (IIP) had shown a growth of 8.4 percent.
Food inflation in the consumer price index (CPI) remained surprisingly subdued (it rose just 3.88% y-o-y in September, compared with 2.2% in August) despite deficient rains, with analysts now predicting the headline inflation to undershoot the central bank’s expectation of 5.8% by January 2016.
The mining sector growth was at 3.8 per cent in August against 1.2 per cent in the same month last fiscal.
What pleasantly surprised analysts was a 21.8% expansion in capital goods and a 6.8% rise in consumer goods in August, albeit aided by favourable bases, as the two segments had contracted 10% and 6.2%, respectively, a year before. Mexico sends almost 80% of its exports, mostly factory goods, to the United States.
Improving manufacturing, mining activity and better offtake of capital goods led to the growth in Index of Industrial Production. Between April and August, it grew at 1.2 per cent. The output of capital goods, a barometer of investment, grew at an impressive rate of 21.8 per cent as against a contraction of 10 per cent in the same month past year.
Malaysia will on Monday release August figures for industrial and manufacturing production, highlighting a light day in Asia-Pacific economic activity. “Government?s efforts to revive manufacturing has started yielding results”, said FICCI Secretary General A Didar Singh.
Separate data showed retail inflation rose marginally in September to 4.41% from the previous month’s 3.74% on the back of a few rise in food inflation but still remained below the RBI’s comfort level.
In August, consumer inflation had fallen to a record low of 3.66 per cent, down from almost 9 per cent a year ago.
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“In absence of support from global demand, IIP growth is very positive and support’s Ind-Ra view of initial growth to come from consumption”.
