India: Industrial output growth gains steam in October
Latest reading: Industrial production rose 3.5% year on year in October (September: +3.1% yoy), matching market expectations. All three main sectors of the industrial sector improved: Electricity, manufacturing and mining. Within the manufacturing sector, the most significant contributors to growth were the output of basic metals, coke and refined petroleum products, and electrical equipment.
Meanwhile, annual average industrial production growth fell to 4.2% in October (September: +4.8%), which marked a 15-month low.
Outlook: October’s print compares favorably with the 2.6% growth in Q3. In line with this, our panelists expect GDP growth to have sped up in October–December to around the 10-year pre-pandemic average of just under 7%, after slowing down unexpectedly fast in Q3. That said, the pace of expansion in GDP will remain lower than in recent quarters.
Panelist insight: Nomura analysts said:
“We believe India is in the midst of a cyclical slowdown, due to fading urban pent up demand, tight monetary policy, slowing nominal income growth and a negative credit impulse.”