New Delhi: Country’s industrial production is expected to stay muted in the near term, owing to weak exports, rural distress, credit constraints and uncertainty over the election outcome, a report said.
According to Dun and Bradstreet’s (D&B) latest Economy Forecast, the Index of Industrial Production (IIP) is likely to have grown by 3-3.2 per cent during February 2019. As per the IIP data in January released by the Central Statistics Office (CSO), the growth in industrial production declined to 1.7 per cent as against 7.5 per cent a year ago, owing to subdued performance of the manufacturing sector, especially capital and consumer goods.
“Given the headwinds in the global economy and domestic structural bottlenecks, the concerns to growth remain heightened,” said Arun Singh, lead economist, Dun & Bradstreet India.
Singh further noted that in the short term, the risks remain accentuated as the concerns on the global front are growing while, domestically, the uncertainty on the outcome of the election will tend to keep the investment activity subdued.
On the prices front, the report said, reversal in food prices that have remained unusually low are likely to push up inflation. Moreover, the election-related spending would exert pressure.