| Date: |
13-04-2015 |
| Subject: |
India's industrial output stronger than expected |
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NEW DELHI--India's industrial output expanded at its fastest pace in three months in February on the back of growth in manufacturing and power.
Government data released Friday showed industrial production grew 5% from a year earlier, accelerating from a 2.8% increase in January and topping market expectations of a 3.3% increase.
Manufacturing output, which contributes about 75% to industrial output, rose 5.2% from a year earlier, while electricity output rose 5.9%. Capital-goods output rose 8.8%, while consumer-goods production increased 5.2%.
"February's stronger growth shows Indian industry is catching a tailwind from lower global oil prices," which are reducing India's import bill, said Bill Adams, senior international economist at PNC Financial Services Group. "India's faster growth is due to the positive supply shock of lower oil prices, as well as more credible monetary and fiscal policies that have stabilized the rupee exchange rate over the past year."
Economists said part of the robust growth during the month is a result of last year's numbers being weaker than usual. In February of last year, industrial output contracted 2% compared with the year earlier.
Other indicators of industrial activity, such as exports and automobiles, point to continued sluggishness in demand in recent months, economists warned.
Alok Shriram, president of the industry body PHD Chamber of Commerce and Industry, said that if India wants to ensure the growth continues and accelerates, it needs to do more to improve the environment for doing business in the country.
"Things are still challenging at the ground level," Mr. Shriram said. "Dynamic policy pronouncements must be implemented with full enthusiasm."
Source : marketwatch.com
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