India’s June industrial output rises at slowest pace in 3 months
INDIA’S industrial output growth rate slipped to a three-month low of 3.7 per cent year on year in June, data from the Ministry of Statistics showed on Friday (Aug 11).
Analysts in a Reuters poll had forecast an expansion of 5.0 per cent. Industrial output for May was revised to 5.3 per cent from 5.2 per cent.
Manufacturing, which accounts for about 17 per cent of the Indian economy, rose 3.1 per cent year on year in June, slowing down from a revised 5.8 per cent annual growth rate recorded in May.
Electricity generation during June rose 4.2 per cent over the same month a year earlier, while mining activities increased 7.6 per cent, the data showed.
In May, electricity generation fell 0.9 per cent, and mining activities increased 6.4 per cent.
“The sequential slowdown was led by the manufacturing sector, while the mining and electricity sectors witnessed an improvement in their growth performance amid deficient rainfall in the month,” said Aditi Nayar, an economist at ICRA.
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India’s central bank sees the economy growing 6.5 per cent in the financial year to the end of next March, with growth led by government capital spending.
In June, infrastructure or construction goods production grew 11.3 per cent year on year, unchanged from the downwardly revised annual growth rate for May. Capital goods grew 2.2 per cent compared to a year earlier.
Consumer spending has been weak though there has been some pick-up in recent months.
Consumer durables output contracted 6.9 per cent year-on-year in June from a revised year-on-year growth of 1.2 per cent the previous month.
Consumer non-durables showed a 1.2 per cent year-on-year growth, compared to an upward revision of 7.6 per cent growth in May.
Sluggish growth of consumer non-durables and the contraction in consumer durables “are not a good sign” for a consumption revival, said Devendra Pant, chief economist at India Ratings & Research.
“Unless consumption demand revives, it is difficult to have a sustained consumption and investment recovery,” Pant said. REUTERS
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