Industrial Production (IP) grew parallel to expectations by 8.9% yoy in calendar adjusted terms (8.8% yoy in raw series) in September. We expect 2021 GDP growth to be 9.5% with risks on the upside considering the expansionary bias of the economy policies.
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Key points
The monthly figure shrank by 1.5% but brought the quarter-on-quarter growth rate to 1.6% in 3Q21, signaling a very slight acceleration compared to 2Q21 (1.5%).
The pace of recovery was more or less maintained in intermediary and capital goods production, whereas the acceleration of consumer goods production (mainly non-durable) was compensated by the deceleration in energy goods production.
Leading indicators such as electricity production, manufacturing sector capacity utilization rate (down to 77.5% in Oct) and slight deterioration in manufacturing PMI (down to 51.2 in Oct), all indicate a slow-down in economic activity.
Given the ongoing strong performance of our Big Data domestic demand indicators in early November, overall demand might remain stronger than the pace of production, indicating further possible decline in inventories and ongoing pull factor on inflation outlook.
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