Volatile Macro Economic Situation Disappointing: PHD Chamber

Negative growth in IIP at -2.1% in the month of November 2013 is disappointing. Though the world economic situation in general and advanced economies in particular are showing signs of improvement during the recent months but industry performance in India disappoints month after month, said Mr. Sharad Jaipuria, President, PHD Chamber.

The most worrying factor is significant slowdown in India's manufacturing sector. The manufacturing sector growth has decelerated to -3.5% during the month of November 2013. The signs of slowdown in the consumer goods segment are also appearing as growth in consumer goods has declined significantly by -8.7%, that too in the festive season, said Mr. Jaipuria.

However, on the external front, as advanced economies are showing signs of revival, export demand is reviving in which India's exports grew at 4% in the month of December while imports declined by 15%. The overall exports growth is estimated at 6% during the period April-December FY2014.

The trade deficit data is also encouraging as it has declined significantly from $146bn during the period April-December FY2013 to $110bn during the period April-December FY2014, said Mr. Jaipuria.

The positive development in the external sector vis-vis reviving export demand can have a significant positive impact on India's current account deficit and more stable rupee in the coming times, he said.

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