India: Industrial production contracts unexpectedly
December 12, 2013
In October, industrial production contracted 1.8% over the same month last year, according to the Quick Estimate of the Index of Industrial Production (IIP). The reading, which contrasted the 2.0% increase observed in September, represents the first contraction in four months. In addition, the October result contrasted the 1.2% increase market analysts had predicted. The contraction in October was the result of a deterioration in both manufacturing production (October: -2.0% year-on-year; September: +0.6% yoy) and mining and quarrying (October: -3.5% yoy; September: +3.3% yoy). Annual average growth in industrial output fell from 1.3% in September to 0.4% in October, ending the virtually-stable trend that began in May and signaling that recovery is fragile. FocusEconomics panelists expect industrial production to increase 0.6% in fiscal year 2013/2014, which is unchanged from last month's forecast. For fiscal year 2014/2015, the panel expects industrial output to expand 4.1%, which is unchanged over the previous month's forecast.
Author: Ricardo Aceves, Senior Economist