Factory Output Rebound Likely In H2

New Delhi: India’s industrial activity is expected to accelerate in the second half of the current financial year on the back of recovering consumption demand and higher export growth, while inflation is likely to ease, according to a Crisil report released on Friday.

“So far, high food inflation, elevated interest rates and slowing credit growth have impacted consumption recovery. However, with food inflation showing signs of easing, the space for discretionary consumption is expected to increase,” the report states.

Moreover, the rural economy will likely improve following healthy agricultural production this year, it adds.

However, the urban economy is facing waning support from credit growth amid elevated interest rates. A lower fiscal impulse from the government is further expected to have a moderating impact on GDP growth. While the government capex is expected to revive in the second half of this fiscal, growth is likely to moderate relative to the previous fiscal.