Commenting on the Index of Industrial Production for January 2018, Chandrajit Banerjee, Director General, CII said that the visible improvement in industrial output, which rose to 7.5% at the onset of the New Year as against 3.5% last year, augurs well for the return of broad based recovery in industrial performance during the year. The rising trend in manufacturing growth also shows that the underlying growth momentum is positive.
What is encouraging is that the capital goods sector has posted robust growth during the month backed by new orders and improved demand. What is also noteworthy is the spike in consumer durables and non-durables demand.
Looking ahead, we expect that industrial performance would be on a clear upslope with both consumption and investment picking up pace during the year.
On retail inflation, CII notes the softening of the CPI inflation print on account of a downswing in food prices. This should spur RBI to resume its rate easing cycle to give a boost to the nascent recovery currently underway in the economy.