India: Industrial output growth wanes in December
Latest reading: India’s secondary sector ended the year on a weak note, with industrial output rising 3.2% year on year in December (November: +5.0% yoy), undershooting market expectations. The figure also marked a four-month low and was the second-weakest in 13 months. December’s notable weakening was due to a deterioration in manufacturing production growth. In contrast, mining production gained steam.
December’s print means that industrial production grew 4.3% over calendar year 2024 as a whole, down from 5.9% in calendar year 2023 but above trend levels. This suggests that the growth of the industrial sector is returning to more sustainable levels after several years of strong post-pandemic recovery.
Outlook: Our panelists expect industrial production to accelerate through FY 2028, comfortably exceeding the 10-year pre-pandemic average throughout the period. The sector will be boosted by government-led investment in infrastructure in areas such as cement, chemicals, power, machinery and metals. Foreign investment by Western firms seeking to decouple from China will add further support. The main downside risk is a surge in global protectionism.