India's industrial production increased significantly in October, at the fastest pace in more than a year, helped by strong growth in manufacturing and electricity output, and far exceeded economists' expectations, latest data showed.
Meanwhile, the consumer price inflation figures released today revealed rising price pressures that could force to the Reserve Bank of India to retain a hawkish stance next week.
The industrial production index, which measures output at factories, utilities and mines, climbed 8.2 percent annually after decreasing a revised 0.7 percent in September, the Central Statistical Office said Wednesday. The latest growth was notably faster than 5.1 percent economists had forecast.
Separately, the statistical office today said that consumer price inflation accelerated moderately to 9.9 percent in November form 9.75 percent in October.
Manufacturing production advanced 9.6 percent, with seventeen of the twenty-two industry groups in sector recording positive growth. Electricity production increased by 5.5 percent, while mining output dropped 0.1 percent from a year earlier.
In the April-October period, overall industrial production moved up 1.2 percent from the corresponding period a year earlier, with manufacturing and electricity output rising 1 percent and 4.7 percent respectively.
Underscoring the strength of the Indian manufacturing sector, the purchasing managers' index for November increased to 53.7 from 52.9 in October, marking the forty-fourth consecutive monthly growth in output.
The robust growth figures for manufacturing and the rising inflation figure have come as the central bank prepares to hold the final rate-setting session of the year on December 18. Economists expect the bank to leave interest rates unchanged, but lower the cash reserve ratio by a quarter-point to 4 percent.
The country's headline inflation, as per the wholesale price index, slowed to a nine-month low of of 7.45 percent in October from September's 7.81 percent as food prices cooled, giving the central bank enough room to keep interest rates high until early next year when it plans a cut.
India's economic growth slowed to a three-year low of 5.3 percent In the September quarter from 5.5 percent in the three months ended June, underlining the importance of implementing reforms to kick start the third largest Asian economy.
In an attempt to underpin economic growth and reduce pressure on its rating, the Indian government this month passed a bill in the parliament to allow foreign direct investment in the retail sector. The government had earlier reduced the subsidy on diesel and limited the supply of subsidized cooking gas to cut country's current account gap.
by RTT Staff Writer
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