Industrial growth is likely to have slowed down to single digits in June after expanding in double digits for eight months in a row, said economists.
"We believe that IIP will be in single digit for the month of June... Maybe around 8 per cent," said Crisil Chief Economist D K Joshi, citing fading out of the base effect.
The Index of Industrial Production (IIP) for June is expected to be released on Thursday.
"The 11.5 per cent rise in May was mostly on account of the base affect. Now IIP will return to the normal level. We believe auto, consumer durables and capital goods would be the best performers," Joshi said.
Industrial growth in April stood at 16.5 per cent before sliding to 11.5 per cent in May. It has registered double-digit growth for straight eight months.
"IIP may possibly go down to single digits. Sectors like automobile are doing well," Yes Bank Chief Economist Shubhada Rao said without giving a forecast on industrial growth in June.
Axis Bank Chief Economist Saugata Bhattacharya, too, said the IIP for June is likely to be slightly less than the May figure due to the decline in production of basic goods.
"In May, the base affect also played a part. Auto and engineering and construction are likely to register the best growth in June," Bhattacharya added.
However, economists say the slowdown in industrial growth is not likely to impact the government's growth projection of 8.5 per cent for the economy during the current fiscal.
"We may possibly see some downslide in industry in the near future, but the agriculture segment is likely to go up. GDP growth is likely to be on target," Yes Bank's Rao said.
While Crisil's Joshi said the 8.5 per cent growth target "is achievable as the monsoon has been good", Bhattacharya of Axis Bank, however, said they expect growth to be "even a notch higher than 8.5 per cent".
