India's industrial production rose at a faster pace in March, helped by strong performance in manufacturing and energy sectors, adding to hopes of a recovery after the central bank lowered interest rates further last week to revive the flagging economic growth.
Overall industrial output grew 2.5 percent from a year ago, notably faster than the revised 0.5 percent gain seen in February, the Central Statistics Office said Friday.
Economists had forecast the growth rate to accelerate to 2.4 percent from the previous month's originally reported 0.6 percent.
Output in the manufacturing sector, which constitutes about 76 percent of industrial production, gained 3.2 percent annually, and electricity production rose by 3.5 percent. Meanwhile, output in the mining sector decreased 2.9 percent.
Among industrial sub-sector, basic goods production rose 2.6 percent from a year earlier, and capital goods output advanced 6.9 percent. There was a 6.5 percent gain in production of consumer non-durables.
Meanwhile, production of durable consumer goods and intermediate goods dropped by 4.5 percent and 0.2 percent, respectively from March 2012.
In the three months ended April, overall production advanced 1 percent from the corresponding period a year earlier, data showed.
The latest purchasing managers' survey, however, painted a slightly bleak picture of the Indian manufacturing sector, with growth decelerating to the weakest level in seventeen months on the back of a slower growth of domestic orders and power outages.
Data from the Society of Indian Automobile Manufacturers (SIAM) today showed that car sales in India decreased 10.43 annually in April, extending the current sequence of declines to six months, which is the longest in the history of the sector. In recent months, demand in the car industry has been hit hard by high interest rates and rising fuel costs.
The Reserve Bank of India lowered its key rates by a quarter point to 7.25 percent at last week's meeting, marking the third reduction so far this year, to revive slowing economic growth.
The central bank said the stance of monetary policy is intended to address accentuated risks to growth, guard against the risks of inflation pressures re-emerging and to appropriately manage liquidity.
The bank projects baseline GDP growth for 2013-14 at 5.7 percent compared with the 5.5 percent growth estimated for the previous fiscal year.
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