India Industry May 2018


India: Industrial production growth slows to a seven-month low in May

July 12, 2018

Annual industrial production growth decelerated to 3.2% in May from April’s revised 4.8% (previously reported: +4.9% year-on-year), undershooting market analysts’ expectations of 4.4% and representing a seven-month low. The reading in May was weighed on by a slow expansion in the manufacturing sector but supported by strong growth in the mining and electricity sectors.

On a use-based classification, industrial production growth in May slowed due to an output contraction of consumer non-durable goods, and weak growth in the production of intermediate goods. Meanwhile, output of capital goods expanded at a fast pace in May, and that of primary, infrastructure and consumer durable goods was also strong.

In June, the Reserve Bank of India had said that, according to survey data for the April-to-June period, industrial activity could be weighed on by higher input prices and perceptions of softening domestic and external demand conditions. These factors may have played a part in the growth slowdown in May.

India Industrial Production Forecast

FocusEconomics panelists expect industrial production to increase 6.0% in fiscal year 2018, which is unchanged from last month’s forecast. For fiscal year 2019, the panel expects industrial output to expand 6.4%.

Author:, Economist

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India Industry Chart

India Industry May 2018

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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