IIP: Industial Inconsistent Production

Perception shifts happens and suddenly we start asking how, when and what did it happened, Till date we were boasting that our economy is growing and we were poised to be the fastest growing economy globally. But the latest IIP Numbers indicates that we were inconsistent and missing the targets.

Today we discover that the green picture of economy was a myth and we are not only stagnant at many ends but also de- accelerating on many fronts.

Be it IIP Number, inflation, fuel cost or benchmark rate hikes; all collectively are giving tough time to Indian economy indicators as a result the indices are closing on an negative note from last three weeks. Today Market was anxiously waiting for the IIP numbers to be announced and post announcement it simply headed south. Major indexes went down and the sentiment being very week.

Sentiments are also weak as, In coming weeks Market pandits expect a .5% hike in lending rates during the next round of economy review meeting of central bank, but as the IIP numbers are below the expectation the rate hike may be limited to .25%.

Efforts and measures of government machinery to curb inflation didn’t generated any positive results and inflation is still a bull on fire; even after a series of rate hike, Growth is getting hampered in an entirety because of series of rate hike. Market is still under the fear of rise in price of petro products, meeting for which is yet pending.

To please the voter government is set to increase the minimum support price for agricultural commodities which will make the products dearer, ultimately adding to food inflation. India’s food inflation may accelerate post October when new crops, affected by higher farming costs and rising oil prices, arrive in the market, there seems to be less relief as on one hand government tries to protect the customer and on other hand it handhold the farmers interest.

Globally there is still a lot of unrest in terms of growth indicators, oil, political and economical stability adding more pressure to Indian indexes.

Time ahead seems to be tougher with interest rate hike in cards, dearer fuel and agricultural commodities and below average returns in equity market.

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