Industrial output expands 8.4%, pace at 25-month high 

Industrial output expands 8.4%, pace at 25-month high 

Context

Strong performances in manufacturing, construction, and consumer non-durables sectors and government spending help spur November IIP

What

Industrial output growth quickened in November to a 25-month high of 8.4% bolstered by strong performances in the manufacturing, construction, and consumer non-durables sectors, official data show

CPI for December

Separately, Consumer Price Index (CPI) data for December showed retail inflation quickened to a 17-month high of 5.21%, spurred by food and fuel price gains.

Growth in various sectors

• The acceleration in the Index of Industrial Production (IIP) growth was significant, coming after October’s 2.24% increase.
• Growth in the manufacturing component of the index touched 10.2% in November, up from 2.47% in the previous month.
• This strong performance was accompanied by a 13.5% jump in the infrastructure and construction sector, up from 5.21% in October.

‘Base effect’

Economists said a low base — in November 2016, when the government demonetised high value currency, IIP grew 5.1% even as the index number itself shrank from the preceding month– and public spending contributed to the stronger IIP reading.