India: Industrial output contracts again in December
February 12, 2014
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%.
Author: Ricardo Aceves, Senior Economist