Contraction Of 10.4% In July In Industrial Production

Marking a fourth straight month of decline, Industrial Production witnessed a contraction of 10.4 per cent, as the government data showed on Friday this week. Economists from the news agency Reuters earlier expected the factory output to plunge by 11.5 per cent in July. In manufacturing which has the maximum weight age of 11.14 per cent among sectors, industrial output fell 11.1 per cent in July. In addition, production in mining slumped 13.0 per cent and dropped 2.5 per cent in power. Moreover, the data was in line with the government’s view that the country’s economy is likely to register a “V- shaped” recovery with an improvement in performance in the coming quarters, indicated by a pickup in rail freight , power consumption and tax collections. The production of eight core sectors also known as infrastructure output, accounts for about 40 per cent of total industrial production. And earlier separate data showed that these eight core sectors declined nearly 10 per cent compared to the corresponding period a year ago. Barclays, in a note stated that continuous moderation in contraction shows that economic recovery has begun, although lockdowns and limited fiscal monetary support obstructs fast recovery.

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