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“Growth in industrial production came at a better-than-expected 5.9% in May, marking the fastest growth in the last seven months. Particularly noteworthy was the double-digit expansion in electricity output for the second month in a row which can be attributed to the increased power demand amid heatwave-like conditions across the country. Furthermore, growth in the manufacturing output improved to 4.6% in May compared to 3.9% in April.

Growth in output of consumer durables was encouraging at 12.3% whereas non-durables output grew by 2.3% following a contraction last month. However, given the volatility in the growth numbers for consumer non-durables in the recent months, it remains to be seen if this improvement is sustained. Consumption recovery faces headwinds from high food inflation.exper From the rural demand perspective, prospects of good monsoon and beginning of Kharif sowing auger well for the demand scenario. However, the distribution of rainfall remains a critical monitorable going forward.”