Growth in India’s industrial production on an annualized basis slipped to a 10-month low of 0.4% (QuantEco estimate: 2.8%, Consensus: 1.8%) in Dec-21 from 1.3% in Nov-21. The moderation was driven by a negative base, as sequentially the index posted a healthy expansion of 7.5%MoM (stronger than average seasonal expansion of 6.5% typically recorded in December). To look at the recent IIP readings objectively, after dipping in Nov-21 owing to post festive fatigue, economic activity had bounced back well in Dec-21. This was underscored by high frequency lead indicators such as GST bills generated, core exports (soared to a record high), fuel consumption and core industries output among others. Our proprietary DART index, i.e., the Daily Activity and Recovery Tracker, premised on several ultra-high frequency indicators too had closed 2021 at a record pre-pandemic high. This however could not translate into higher annualised IIP growth, as economic recovery post the first wave of COVID/nation-wide lockdown had gained momentum in Q3FY21, thereby creating an adverse statistical base impact for Dec-21.
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