August IIP seen at 2.5%; Sep CPI may rise above 9%: Poll

Written By Unknown on Jumat, 11 Oktober 2013 | 10.54

The Index of Industrial Production (IIP) data for the month of August is expected to show a momentum on the upside, so the consensus estimate is 2.5 percent, says a CNBC-TV18 poll. In July, it stood at 2.6 percent and street estimates are between 1.4 to 3.3 percent, so there are no declines or contractions estimated from IIP this time, reports CNBC-TV18's Ekta Batra.

Why is the street so optimistic on IIP?

The core sector IIP, which is 38 percent of the weight of IIP is at a seven month high at 3.7 percent. In July, when the core sector data had come in at 3.1 percent, IIP jumped to 2.6 percent. Therefore, economists are likely to be more optimistic on IIP data this time around.

Also read: REITs get thumbs up from Sebi

Sector wise data

Electricity is expected to grow over 6 percent and according to most estimates manufacturing is expected to see a growth of around 2.4 percent.  However, the mining sector may continue to decline as it has been declining continuously for many months.

Furthermore, the manufacturing Purchasing Managers' Index (PMI) data has been completely contradictory for the month of August as well as for September showing a contraction.

The consumer price index (CPI) data, which comes out along with the IIP data is expected to be elevated above 9 percent but the street is working with a flattish amount of CPI data for September. So it is expected to come in around 9.44 versus 9.5 percent. The range for that is within that band of around 9.4 to 9.6 percent.

Food inflation would be one key parameter to watch out for as it has maximum weightage within CPI.

Last month, Wholesale Price Index (WPI) and CPI were contradictory. The WPI food inflation data came in much higher on a month-on-month basis whereas CPI came in much lower.



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