IIP to remain subdued due to high interest rates: Analyst
The Index of Industrial Production is expected to remain subdued during the months to come due to high interest rates.
By PTI |
MUMBAI: The Index of Industrial Production is expected to remain subdued during the months to come due to high interest rates, global business information service provider Dun & Bradstreet India said on Thursday.
Though the IIP grew by seven per cent during April, the growth during the first four months of the current calender year stands at only six per cent compared to 12 per cent recorded during the same period last year, a top official of the firm said.
"High interest rates have played a significant role in containing domestic demand, evident in the lower IIP growth figures," Dun & Bradstreet COO Kaushal Sampat said in a statement here.
He said with inflation above eight per cent and with inflationary pressures building up in the economy, the RBI has increased the repo rate by 0.25 per cent to eight per cent.
Though the measure would help in containing inflation expectations, it is unlikely to have a direct impact on curbing it in the short-term as the current inflation is due to supply side constraints in both domestic and international markets, he said.
Banks are likely to raise lending rates in the months to come (due to repo rate hike) thus impacting credit offtake and growth, Sampat said.
"We expect IIP to remain subdued during the months to come," he said.
Though the IIP grew by seven per cent during April, the growth during the first four months of the current calender year stands at only six per cent compared to 12 per cent recorded during the same period last year, a top official of the firm said.
"High interest rates have played a significant role in containing domestic demand, evident in the lower IIP growth figures," Dun & Bradstreet COO Kaushal Sampat said in a statement here.
He said with inflation above eight per cent and with inflationary pressures building up in the economy, the RBI has increased the repo rate by 0.25 per cent to eight per cent.
Though the measure would help in containing inflation expectations, it is unlikely to have a direct impact on curbing it in the short-term as the current inflation is due to supply side constraints in both domestic and international markets, he said.
Banks are likely to raise lending rates in the months to come (due to repo rate hike) thus impacting credit offtake and growth, Sampat said.
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"We expect IIP to remain subdued during the months to come," he said.
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