NEW DELHI: In a setback to the euphoria around the economy, the country’s industrial production declined to a three-month low of 3.7% in June 2023, compared to 5.3% in the month of May, according to official data released on Friday.
In June 2022, the industrial production measured by the Index of Industrial Production (IIP) had recorded a growth of 12.6%. The fall in growth is mainly on account of a massive dip in the growth of manufacturing sector, which has a weight of 77.6% in IIP.
The manufacturing sector grew by 3.1% in June 2023, a significant decline from the 12.9% growth in the same month of the previous year, while in May it grew at 5.8%. The mining sector experienced a growth of 7.6% in June 2023, slightly lower than 7.8% growth observed a year earlier but higher than May growth of 6.4%. The electricity sector saw a growth of 4.2% in June 2023, compared to 0.9% growth in May.
For the April-June period of the financial year 2023-24, the IIP growth stood at 4.5%, down from 12.9% during the corresponding period last year. According to most analysts, the June IIP growth is lower than their estimate. Dharmakirti Joshi, Chief Economist with CRISIL Ltd, said, “This was lower than market expectations and in contrast with the S&P Purchase Managers Index, which had printed a very positive 57.8 in June.”
According to him, going forward, two factors can swing the industrial performance — slowdown in the advanced economies, and inadequate monsoon in India. “Though the major Western economies have remained resilient in the first half of this year, S&P Global expects a shallower, but more protracted, slowdown as interest rates stay elevated for longer.”
Industrial output growth at 4.5% in April-June
For the April-June period of the financial year 2023-24, the Index of Industrial Production growth stood at 4.5%, down from 12.9% during the corresponding period last year. According to most analysts, the June IIP growth is lower than their estimate.
