Analysts do not see any monetary policy action based on inflation or growth this year

Inflation came in line with market expectations, however, industrial output came in slightly lower than expected, as per Motilal Oswal Financial Services.

At the same time, real GDP growth came in much better than expected for 3QFY24. With continued robustness in HFIs for January 2024 and February 2024, there is a possibility of positive surprise for 4QFY24 GDP growth as well. “We see inflation at 5.4 per cent in 4QFY24, before easing to 3.8 per cent in 1QFY25. Thus, we do not see any monetary policy action based on inflation or growth this year,” the brokerage said.

India’s industrial output growth slowed to 3.80 per cent during January 2024 as compared with 4.25 per cent during December 2023. The stable progress in mining and electricity indices signals pickup in capacity utilisation of firms, says Amnish Aggarwal, Director – Research, Prabhudas Lilladher.

Further, consumer durables posted sharp growth helped by strong demand amid cooling inflation. However, prospects of consumer nondurables continued to remain bleak dragging down the overall index, the research said.

Looking ahead, factory output is likely to benefit from recovering domestic demand. However, subdued global demand may erode growth of export intensive sectors such as leather, textiles and apparels. The Government’s continued focus on infrastructure building coupled with growing private capex bodes well for the infrastructure and capital goods sector, Aggarwal said.

Consumer non-durables growth is likely to be guided by growth in urban employment and rural income while consumer durables trajectory will be led by inflation and interest rates ruling the economy, he added.