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October industrial production figures will remain strong due to festive demand; Report claims - growth will be 3.7%
IIP: According to the November bulletin of the Reserve Bank of India (RBI), rural India emerged as a key contributor to the recovery in demand during the festive season. This was boosted by a sharp increase in Kharif crop production and optimism about the upcoming rabi crop. E-commerce companies particularly benefited from this trend, which reported strong sales in rural markets. Know what a report by the Union Bank of India says on IIP.
As per the report by the Union Bank of India, due to festive demand India's industrial production is likely to improve in October 2024. The report pointed out that the Index of Industrial Production (IIP) grew by 3.7% year-on-year as compared to 3.1% in September. Yet this is much lower than the 11.9% growth recorded in October 2023, which was driven by a low base effect.
As per the IIP, "Industrial production growth indicated by the IIP may improve to 3.7% year-on-year as compared to 3.1% in the previous month and 11.9% in October 2023." The report also said that high-frequency indicators suggest that aggregate demand has strengthened again during the festive season. Strong rural and urban consumption, driven by better production and spending patterns, supported the uptick in demand.
According to the report, a better performance by the core sector, which contributes 40% to the IIP, has played a key role in this improvement. It grew 3.1% in October, the three-month high, as against a growth of 2.4% in September. The improvement was credited to higher production of coal, steel, and electricity. The production of fertilizers, refinery products, and cement declined while the production of crude oil and natural gas also showed a decline during the same comparative period.
