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IIP rises 2.7% in January, shrugging off demonetisation impact

LiveMint logoLiveMint 10-03-2017 Remya Nair

New Delhi: India’s factory output, as measured by the index of industrial production (IIP) rose 2.7% in January, shrugging off the impact of demonetisation. Factory output had contracted by 0.4% in December.

Data released by the Central Statistics Office (CSO) showed that in January, mining, manufacturing and electricity registered positive growth.

While mining grew 5.3%, manufacturing rose 2.3% and electricity generation grew 3.9%.

Capital goods production—a key indicator of the investment demand in the economy—also rebounded growing by 10.7% in the month.

However, for the 10 months ending January, capital goods production contracted by more than 21%.

In an indication that consumer demand is yet to pick up, consumer goods production contracted by 1% mainly on account of a sharp fall in consumer non-durable goods production.

In terms of industries, nine of the twenty two industry groups registered positive growth. Electrical machinery and apparatus registered the highest growth followed by radio, TV and communication equipment and basic metals.

The factory output data along with the retail and wholesale price inflation data to be released next week will be the last set of data before the release of the next monetary policy statement by the Reserve Bank of India scheduled on 6 April.

RBI had shifted its stance to neutral in its 8 February policy and kept the policy rates unchanged citing its aim to ensure retail inflation remains at 4%.

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