India Industry


Industrial output contracts again in December

In December, industrial production contracted 0.6% over the same month of the previous year according to the Quick Estimate of the Index of Industrial Production (IIP). The reading, which followed the revised 1.3% decrease observed in November (previously reported: -2.1% year-on-year), came in above 1.2% decrease the market had expected. The reading marks the third consecutive contraction, which underscores the fragility of the recovery in the industrial sector.

December's result showed a deterioration in manufacturing production (December: -1.6% yoy; November: -2.7% yoy). Conversely, increases over the previous month were recorded in mining and quarrying (December: +0.4% yoy; November: -1.7% yoy) and electricity production (December: +7.5% yoy; November: +6.3% yoy). Despite December's contraction, annual average growth in industrial output remained at November's 0.5%.

FocusEconomics panelists expect industrial production to increase 4.2% in fiscal year 2014/2015, which is up 0.2 percentage points from last month's forecast. For fiscal year 2015/2016, the panel expects industrial output to expand 5.1%.

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India Industry Chart

India Industry December 2013

Note: Year-on-year and annual average variation of industrial production index in %.
Source: Ministry of Statistics and Programme Implementation (MOSPI) and FocusEconomics calculations.

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