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India: Industrial production eases in July

September 11, 2015

In July, industrial production expanded 4.2% compared to the same month last year. The reading was below June’s revised 4.4% increase (previously reported: +3.8% year-on-year), but overshot the 3.5% expansion that market analysts had expected.

July’s slowdown was driven by weaker manufacturing growth. Manufacturing production rose 4.7% over the same month last year, which was below June’s 5.4% rise. In contrast, electricity production picked up from June’s 1.3% expansion to 3.5% growth in July and mining swung from a 0.5% contraction in June to a 1.3% expansion in July.

On a use-based classification, the figure was driven by a deterioration in the production of consumer goods and basic goods Production of capital and intermediate goods improved compared to the previous month.

Despite the weaker performance in industrial production, the trend improved in July. Annual average growth in industrial production moved up from June’s 2.5% to 2.8% in July.

FocusEconomics panelists expect industrial production to increase 5.5% in fiscal year 2015, which is unchanged from last month’s forecast. For fiscal year 2016, the panel expects industrial output to expand 6.5%.


Author: Angela Bouzanis, Senior Economist

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