The Hindu : CMIE expects slowdown

Online edition of India's National Newspaper
Friday, May 02, 2003

Business

Business

CMIE expects slowdown

MUMBAI MAY 1. The Centre for Monitoring Indian Economy (CMIE) expects a slowdown in industrial growth to 4.5 per cent during 2003-04 due to delayed adverse impact of drought on rural spending. "We have assumed a below normal rainfall of 96 per cent of the long-term average as predicted by the meteorological department and adverse impact on rural spending to dampen the industrial growth prospects in the current financial year," CMIE said in a release here today.

The automobile industry is likely to record a lower growth in this fiscal due to a slump in rural demand for two-wheelers. CMIE forecasts a 10 per cent decline in two-wheeler sales during the fiscal, the release added.

Two-wheeler sales had posted a `healthy growth' of 17.3 per cent in 2002-03 and 15 per cent in 2001-02, it said.

CMIE, quoting its industry analysis service (IAS) study, said the light commercial vehicle (LCV) segment would also record a decline in sales in the fiscal. LCV had registered an unprecedented growth of 27 per cent in 2002-03, it said. Medium and heavy commercial vehicles sales, which had posted a robust growth of 27.6 per cent in 2002-03, are also expected to slow down in 2003-04, CMIE said, adding the sector has already witnessed a slowdown in March 2003.

The steel and cement sectors are also likely to post a lower growth in output in this fiscal, even though the impact of infrastructure spending is expected to continue during most part of the current year, CMIE said.

CMIE forecasts finished steel output to grow by 4 per cent after recording a growth of 6 per cent between April 2002 and February 2003. The economic think-tank expects cement production to be around 7 per cent during the current fiscal, a decline from 8.8 per cent growth posted during the previous fiscal and 9.7 per cent growth recorded in 2001-02.

Steel prices have been rising mainly due to the demand from China, as 2008 Olympics is scheduled to be held in the country, CMIE said. "Cement prices were weak during most part of 2002-03, and the prospects of a rise in price depended on the monsoon," the release added. Sugar production in India was `expected to decline or record no growth' during the fiscal, as sugarcane production might decline due to the drought. The oilseeds output was also hit, leading to decline in edible oil production, CMIE said.

CMIE expects the production index of food products to slowdown `significantly' to around 1.6 per cent in 2003-04 as compared to 9.2 per cent recorded during April-February 2002-03.

Contrary to its negative outlook, CMIE said the apparels sector was likely to `fare well for the second consecutive year' this fiscal. It expects the sector to post `healthy' growth at 18-20 per cent in 2003-04. Exports of apparels had posted a 16.3 per cent growth during April-November 2002, it said and added that in preparation for lifting of export quotas in 2005, many global retail chains have begun identifying Indian suppliers for sourcing their requirements. — PTI

Printer friendly page
Send this article to Friends by E-Mail

Business

Stories in this Section

CMIE expects slowdown

IFC to increase exposure in India to $1 b

BoB, Union Bank to cut PLR, deposit rates

Chasms in WTO talks on import tariffs

IOC plans for new petrol pumps

VSP keen on captive ore mine in Orissa

Walmart, GAP to make India sourcing hub

Centre seeks to end TMB imbroglio

Exploit poverty to improve quality — Prahalad