India: Industrial production expands more than expected in January
March 12, 2013
In January, industrial production expanded 2.4% over the same month last year, according to the so-called quick estimate for the index of industrial production (IIP). The reading, which marks the first increase in three months, contrasted the revised 0.5% drop observed in December (previously reported: -0.6% year-on-year) and exceeded market expectations, which had industrial output rising 1.2%.
The stronger-than-expected expansion was buttressed by a rebound in manufacturing production - which accounts for over three quarters of industrial production (January: +2.7% yoy, December: -0.7% yoy). On a use-based classification, production of both intermediate and consumer goods improved substantially over the previous month.
As a result of the monthly reading, the trend now points upwards, with annual average growth in industrial production inching up from 0.8% in December to 0.9% in January.
Panellists polled by FocusEconomics expect industrial production to increase 5.0% in the fiscal year 2013/14, which is down 0.1 percentage points from last month's forecast. For the fiscal year 2014/15, the panel anticipates industrial output to expand 7.0%.
Author: Ricardo Aceves, Senior Economist