"The divergence in growth of core and non-core segments in IIP has imparted some degree of volatility in the IIP series. Despite the dip in the core industries, IIP reared up, defying the consensus estimates for May-15," Dun & Bradstreet India Senior Economist Arun Singh said in a research note.
Growth rate of India's industrial output for May is likely to be in the same range as the previous month, although with a downward bias owing to the base effect, says a Dun & Bradstreet report.
According to the research firm, although some incipient signs of revival in domestic demand are visible, overall demand, including external, continues to remain subdued.
D&B expects IIP to have grown by 3.5-4.0% during May-15.
Industrial production grew at a two-month high of 4.1% in April, primarily driven by the manufacturing sector, but capital goods growth slowed.
"The divergence in growth of core and non-core segments in IIP has imparted some degree of volatility in the IIP series. Despite the dip in the core industries, IIP reared up, defying the consensus estimates for May-15," Dun & Bradstreet India Senior Economist Arun Singh said in a research note.
D&B further said that the international market is braced for two significant developments -- Greece exit and timing of fed hike -- that might disrupt the global financial market and in turn the real growth trajectory in India.
"Domestic measures to support growth must be robust as the international market is braced for two significant developments that might disrupt the global financial market and in turn the real growth trajectory in India," Singh added.
Moreover, the uncertainty amongst international investors regarding Greece to default on its debt repayment and the exit of Greece from the Euro Zone is likely to keep rupee under pressure.
D&B expects the rupee to average at around 64.00-64.20 per USD in June 2015.
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