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MOSL: ECOSCOPE: IIP posts unexpected decline in Mar’19-Expect GDP growth to decelerate in 4QFY19

ECOSCOPE: IIP posts unexpected decline in Mar’19; Expect GDP growth to decelerate in 4QFY19

 

• The Index of Industrial Production (IIP) posted an unexpected decline of 0.1% YoY in Mar'19, as against our expectation (and market consensus) of 1.3% growth. This was the first decline in 21 months. It implies that IIP grew 0.5% YoY in 4QFY19, marking the slowest growth in at least the past five years.
• The manufacturing sector declined for the second consecutive month; mining activities grew slowly and power generation grew at faster pace in Mar'19. Slower growth in food products and faster contraction in pharmaceuticals and the automobile sector led to continued weakness in the manufacturing segment.
• According to the use-based classification, capital goods posted its fourth decline (totally unexpected) in the past five months, while production of consumer goods declined at the fastest pace in 27 months (led by durable goods). Construction and primary activities, however, grew faster.