Industrial recovery may well be back as economists projected factory production to grow by a whopping over nine per cent in August against 6.8 per cent in the previous month, on the back of robust activities in core sector.
The government will come out with data on Index of Industrial Production (IIP) on Monday.
“There has been strong support from mining and electricity coupled with growth in manufacturing sector. I expect IIP to be 9.9 per cent in August,” Yes Bank Chief Economist Shubhada Rao told PTI.
In July, factory production expanded at a greater pace for the second month in a row growing by 6.8 per cent against 6.4 per cent a year ago, signalling an industrial recovery.
It was for the first time in June that the industry grew by a high rate of 8.2 per cent, after it was hit hard by the global financial crisis in the middle of September last year.
Axis Bank Economist Saugata Bhattacharya said the factory production is likely to breach nine-per cent mark in August mainly due to base effect.
“I expect Industrial growth at 9.2 per cent in August. The rise from July is mainly due to base effect,” he said.
According to HDFC Bank economist Jyotinder Kaur, industry could grow by 8.8 per cent in August.
“The rise of IIP is mainly due to base effect. The core sector is also high and exports have also picked up on the sequential basis,” Kaur said.
Economic think—tank Institute of Economic Growth (IEG) has recently said as the economy is showing signs of recovery the industry would pick up further momentum with a growth of more than seven per cent in August and nearly nine per cent in October.
“The Index for Industrial Production (IIP) has shown an impressive growth of 6.8 per cent (in July). This figure was slightly higher than the last year’s growth. It is definitely a pointer towards the revival of industrial growth,” the IEG had said in its monthly monitor for the economy.
Indian industry came under adverse impact after US financial services icon Lehman Brothers collapsed, deepening the financial crisis across the world.