Jan IIP beats street: How do experts read it?

The Index for Industrial Production (IIP) has come in at 3.7% for January, much higher than street estimates. According to a CNBC-TV18 poll, industrial output was estimated to be at 2.7% (YoY).

The capital goods sector has hugely disappointed with a degrowth of (-)18.6% versus 57.9% (YoY). However, surprises came in from electricity sector which saw an annual growth at 10.5% against 5.6%. Consumer non-durable goods grew at 6.9% (YoY) compared to (-)7%. Starting from December itself, India has been struggling with a very high base which itself is bound to keep numbers a little lower. IIP had hit 20-month low of 1.6% in December. Food and fuel inflation eased in late-February, but remained at elevated levels, maintaining the case for further monetary tightening to keep a lid on headline inflation. India's food price index rose an annual 9.52% in the week to February 26, slower than a 10.39% rise in the previous week as prices of vegetables, potatoes and rice declined, data showed on Thursday. The HSBC Markit Purchasing Managers' Index, an indicator of manufacturing expansion, rose to a three-month high of 57.9 in February from 56.8 in January. That was the 23rd consecutive month the key index of manufacturing in Asia's third-largest economy has been above the 50 mark, that divides growth from contraction. The manufacturing sector grew 5.6% in October-December from a year earlier, government data released on February 28 showed. India's exports in January rose an annual 32.4% to USD 20.6 billion, government data released last week showed. Sector-wise growth in January

• Manufacturing sector growth at 3.3% vs 17.9% (YoY)
• Mining sector growth at 1.6% vs 15.3% (YoY)
• Capital goods growth at (-)18.6% vs 57.9% (YoY)
• Electricity sector growth at 10.5% vs 5.6% (YoY)
• Basic goods growth at 7.6% vs 11.5% (YoY)
• Intermediate goods growth at 7.9% vs 22.2% (YoY)
• Consumer goods growth at 11.3% vs 0.4% (YoY)
• Consumer durable goods growth at 23.3% vs 28.2% (YoY)
• Consumer non-durable goods growth at 6.9% vs (-)7% (YoY)

How do experts read the IIP data? Siddhartha Sanyal, Chief India Economist, Barclays Capital said,