Quote on IIP by Rahul Agrawal, Principal Economist, ICRA Ltd
Below the Quote on IIP by Rahul Agrawal, Principal Economist, ICRA Ltd
"The year-on-year (YoY) growth in the IIP inched up to 5.1% in May 2026 from 4.9% in April 2026, on the back of a sharp acceleration in electricity generation growth, driven by elevated temperatures as well as a low base. This segment pushed up the headline IIP print by as much as 57 bps between these months, which was partly offset by weaker performance across other sectors.
Manufacturing output growth slowed to 5.5% in May 2026 from 6.1% in April 2026, despite a favourable base, amidst a broad-based deceleration across 15 of the 23 sub-segments between these months. Mining output witnessed a contraction for the 5th consecutive month in May 2026, although the extent of the same narrowed vis-à-vis April 2026.
Interestingly, four of the six use-based segments, barring intermediate goods and infrastructure/construction goods, witnessed an improvement in their growth performance in May 2026 relative to April 2026. The consumer durables and non-durables segments recorded the highest growth in 5 months in May 2026.
The MoSPI has shifted to using the output PPI as the deflator for a large number of items in the IIP basket, from the WPI earlier. This has led to material changes in growth across segments such as manufacturing and is also likely to lead to revisions in the GDP data."
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