India: Industrial output posts weak growth
March 11, 2011
In January, industrial production grew 3.7% over the same month the year before, according to the so-called quick estimate for the index of industrial production (IIP). The reading came in above the weaker 2.5% increase tallied in December (previously reported: 1.6% year-on-year) and overshot market expectations of a 2.9% increase. The acceleration over the previous month was buttressed by stronger growth in the manufacturing sector as well as in electricity generation. Furthermore, on a use-based classification, the monthly improvement was mainly the result of increased production of consumer goods, which was partially offset by a sharp decline in the production of capital goods (-18.6% year-on-year). Owing to the weak figure, the trend in industrial production continues to deteriorate. As January's print represented only a fraction of the robust 16.8% expansion recorded in the same month last year, annual average growth in industrial output dropped to 9.4% from 10.6% in December. The national statistical office recently stated that it expects industrial output to rise by 8.0% in the current fiscal year, ending March 2011.