Inflationary pressures are moderating and inflation is projected to fall to 5.1 per cent in Q1 FY24 from 6.2 per cent in the preceding quarter, the report said.
Investment activity is also expected to improve, drawing strength from the thrust on capital expenditure in public spending and moderation in commodity prices, it noted.
The manufacturing sector as a whole is expected to gain from softening input cost pressures.
The consumer price index (CPI) inflation print for April 2023 indicates that momentum is turning out to be softer than anticipated.
Moreover, with capacity utilisation in manufacturing straining at trend levels and above it in some industries, private capital spending will need to get stronger to add additional capacity as demand picks up, the report said.
Fibre2Fashion News Desk (DS)