NEW DELHI: Indian industrial production was unexpectedly weak in August, official figures yesterday showed, suggesting that recovery of Asia’s third-largest economy may still be some way off.
Output of factories, mines and utilities grew by a marginal 0.4 percent in August from the same month a year earlier, far undershooting a consensus market forcecast of 2.2-percent growth.
The slack output was a dampener for the right-wing government of Prime Minister Narendra Modi, who took office in May following a landslide election win.
Modi has promised to revive an economy that grew by 4.7 percent in the last financial year to March, down from near double-digit expansion a few years ago. “The data is indeed disappointing,” said Debopam Chaudhuri, chief economist at ZyFin Research.
Manufacturing production, which represents three-quarters of the Index of Industrial Production, contracted by 1.4 percent in August.
“Sectors continue to reel under the slowdown,” said A. Didar Singh, secretary general of the Federation of Indian Chambers of Commerce and Industry.
July output growth was revised downward to 4.4 percent from 4.5 percent, according to the data.
Factory output was hit in August by a 11.3-percent decline in production of capital goods such as plant equipment — a harbinger of future investment intentions.
Patchy consumer demand was underscored by a 6.9-percent shrinkage in production of consumer goods such as fridges and stoves. “The fall in manufacturing growth has not yet bottomed out,” FICCI’s secretary general said. “It is more worrisome to see negative growth in consumer and capital goods especially when we were hoping demand would pick up,” he said.
The gloomy data came after the HSBC Manufacturing Purchasing Managers’ Index, keenly watched as a portent of industrial expansion and overall economic health, suggested factory activity expanded at its slowest pace in nine months in September.
AFP
