March factory output will grow at 1.9 pc: India Ratings

Industrial production in March is likely to grow at 1.9 per cent while deflationary pressure in the wholesale price index will moderate in April data, India Ratings and Research said today. Ind-Ra estimates the Index of Industrial Production (IIP) growth for March to come in at 1.9 per cent and Wholesale Price Index (WPI) based inflation at (-)0.4 per cent in April.

The Consumer Price Index (CPI) based retail inflation is projected to come around at 4.9 per cent, it said.

“Industrial production in March 2016 is likely to remain close to February 2016 levels and on the price front wholesale price deflation will continue to moderate and retail inflation will remain stable in April 2016,” Ind-Ra said in a statement.

Industrial production grew 2 per cent year-on-year in February after staying negative for the last three months.

Ind-Ra said it expects industrial production in March to get a boost from better performance in the core sectors of the economy.

The eight core industries that comprise around 38 per cent of IIP grew 6.4 per cent YoY in March as against 5.7 per cent in the previous month.

“Ind-Ra believes electricity and steel production will drive industrial production in March 2016,” it said.

It said wholesale price deflation to continue despite high prices of pulses and sugar. WPI has been negative for the last 17 months, however, deflation is likely to moderate in April.  WPI inflation was (-)0.9 per cent in March.

Ind-Ra said it expects benign oil prices to continue in current fiscal.

Retail inflation, it said, will remain stable at 4.9 per cent in April as against 4.8 per cent in March and 5.3 per cent in February.

“Soft oil prices will keep retail inflation in check, although price pressures could emerge from food items such as sugar and pulses,” it said.

IIP for March and CPI for April is scheduled to be released on May 12, WPI for April is scheduled for release on May 16.