Industrial Output Growth Hits a Six-Month Low

Industrial production in February witnessed a significant slowdown, growing by just 2.9%, the lowest in six months. This downturn was primarily due to sluggish performances in the manufacturing and mining sectors, with consumer non-durables continuing to contract.

Behind the Numbers

The National Statistical Office (NSO) reported that the Index of Industrial Production (IIP) grew by 2.9% in February, a sharp decline from 5.6% in the same month last year and below January's 5.2%. The manufacturing sector's growth slowed to 2.9%, mining to 1.6%, and electricity to 3.6%.

Global and Domestic Factors at Play

Experts attribute the slowdown to global geopolitical tensions and the lingering effects of the US-China tariff war. Despite these challenges, domestic demand is expected to partially mitigate the impact on GDP growth.

Consumer Sector Performance

Consumer non-durables contracted by 2.1%, while the durables segment grew by a modest 3.8%, significantly lower than the previous year's 12.6%. Rural demand shows signs of improvement, but urban consumption remains a concern.

Looking Ahead

With the Reserve Bank of India's recent rate cuts and anticipated easing of inflationary pressures, there's hope for some recovery in private investment and consumption, despite ongoing global uncertainties.