Industrial production contracted for the second consecutive month, falling 2.1% in November, as manufacturing activity slumped, raising concerns of a prolonged slowdown. The latest data has raised a fresh dilemma for the Reserve Bank of India which is due to take a call on interest rates later this month.
While mining and electricity managed to stay in positive territory, a 3.5% decline in manufacturing output meant that the overall index of industrial production stayed in the red.
What will come as a bigger worry is that compared to October 2013, production across factories and power utilities was lower in November, resulting in a month-on-month decline in IIP.
Economists do not expect industrial activity to pick up immediately.
Ratings and research firm Crisil too predicted tepid growth in the remainder of 2013-14, citing infrastructure and input constraints and weak domestic demand.
No comments:
Post a Comment