Click to play videoNew Delhi: The Index of Industrial production is showing signs of slight recovery even as inflation has been falling for the past few weeks
Industrial output numbers for January may herald some good news for the economy. Though industrial growth is negative for the second straight month, it has gone up to -0.5 per cent from -0.6 per cent.
In another positive development there has been a marked increase in the growth of consumer durables and capital goods output. Analysts expect these cues will help in recovery from the next quarter.
"Quarter 3 was possibly the lowest point of IIP and progressively we are seeing some positive improvement like auto sales for instance, cement sales. So some positive fallout of impetus through fiscal measures is possibly playing out very gradually. No two ways about it," says Yes Bank Chief Economist Shubhada Rao.
Consumers can also take heart as inflation fell to a seven-year low of 2.43 per cent.
But there could be a negative to the falling inflation. Economists say that a further drop could lead to deflation which will be the next point of worry for the economy.
"Jobs, salaries income growth business opportunities are in adverse environment that’s why prices are coming down. Deflation is the symptom of deeper economic malice. Taking a broader perspective if deflation persists for long it can be very negative," warns HDFC Bank Chief Economist Abheek Barua.
So falling inflation numbers could be the next cause of concern for the economy, even though industrial growth may be looking up.
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