India’s factory output growth eases - GulfToday

India’s factory output growth eases

India-Factory

Employees work on an assembly line of Hero Motocorp plant in Neemrana, Rajasthan. Reuters

India’s factory output growth eased in May 2019 as it rose by 3.1 per cent from a revised growth of 4.32 per cent reported for April 2019, official data showed on Friday.

Even on a year-on-year (YoY) basis, May’s industrial production growth of 3.1 per cent was lower than the 3.8 per cent achieved during the corresponding month of the previous fiscal.

“The cumulative growth for the April-May 2019 period over the corresponding period of the previous year stands at 3.7 per cent,” the Ministry of Statistics & Programme Implementation said in ‘Quick Estimates of Index of Industrial Production’ (IIP).

Meanwhile, higher food prices accelerated India’s June retail inflation to 3.18 per cent from 3.05 per cent in May, official data showed on Friday. However, on a year-on-year (YoY) basis, the Consumer Price Index (CPI) in June 2019 was lower than the corresponding period of last year when retail inflation stood at 4.92 per cent. According to the data furnished by the National Statistical Office (NSO), the Consumer Food Price Index (CFPI) inflated to 2.17 per cent during the month under review from an expansion of 1.83 per cent in May 2019.

Separately, India’s strong diesel demand growth is decoupling from the car market as motorists increasingly turn to gasoline vehicles, leaving it more reliant on patchy demand from construction and heavy industry. A slowdown in demand growth in India — one of Asia’s biggest diesel guzzlers — could add to a persistent glut of diesel in the region, fuelled in part by strong exports from China, and put pressure on regional refining profit margins .

Transportation has historically accounted for two-thirds of India’s diesel use, but a steady decline in diesel’s discount to gasoline has seen sales of diesel-powered cars fall to a record low share of total sales, according to industry body Society of Indian Automobile Manufacturers (SIAM).

Agencies