India: Industrial production slows to a crawl
February 10, 2012
In December, industrial production expanded 1.8% over the same month the previous year, according to the so-called quick estimate for the index of industrial production (IIP). The reading was down from both the 5.9% increase recorded in November as well as market expectations of a 3.4% rise. The slowdown was primarily driven by a sharp deceleration in manufacturing output, which accounts for over three quarters of industrial production. On a use-based classification, the monthly figure mainly reflected plummeting growth in capital goods production as well as a contraction in intermediate goods. As a result of the weak monthly expansion, the trend in industrial production continues to point downwards, with annual average growth falling from 5.3% in November to 4.7% in December. According to preliminary government estimates, the economy will expand 6.9% this current fiscal year, which will end in 31 March.