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India: Industrial production rises for fourth consecutive month, although at slower pace

September 11, 2014

Industrial production in July increased 0.5% over the same month last year, according to the Quick Estimate of the Index of Industrial Production (IIP). The reading marked a notable deceleration over the revised 3.9% expansion tallied in June (previously reported: +3.4% year-on-year) and undershot market expectations of a 1.8% expansion.

The deceleration came on the back of a broad-based slowdown. Mining decelerated from a 4.5% expansion in June to a 2.1% rise in July. Electricity generation, although solid, moderated the pace of expansion from a 15.7% increase in June to 11.7% expansion in July. Conversely, manufacturing output swung from a 2.5% increase in June to a 1.0% contraction in July.

Among the categories that measure the type of goods produced, the production of capital goods registered the sharpest deterioration; plunging from a 23.3% increase in June to a 3.8% decrease in July. Growth in basic goods production slowed from 10.0% in June to 7.6% in July. Only intermediate goods expanded faster in July. Consumer goods’ output continued to deteriorate, contracting at double-digit rates in July.

FocusEconomics panelists expect industrial production to increase 3.6% in fiscal year 2014/2015, which is unchanged from last month’s forecast. For fiscal year 2015/2016, the panel expects industrial output to expand 5.5%.


Author:, Senior Economist

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India Industry July 2014

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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