Industrial output slips 0.4% in September

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Revised government figures released on Monday showed August output growth was revised down to 2.3 percent from 2.7 percent.   (Reuters) Revised government figures released on Monday showed August output growth was revised down to 2.3 percent from 2.7 percent. (Reuters)
SummaryManufacturing, which constitutes about 76% of industrial production, fell by 1.5%.

in the same month last year. This segment grew by 1.4 per cent in first half of this fiscal, as against 4 per cent in the same period of 2011-12.

The basic goods production growth slowed to 3.5 per cent in September, as against 5.3 per cent the year-ago period.

During the April-September period, this segment recorded a growth of 2.9 per cent, compared to 7.3 per cent in the first half of last fiscal.

Power generation growth rate slowed to 3.9 per cent in September, compared to 9 per cent in the same month a year ago. The segment grew by 4.6 per cent in the April- September period this fiscal, as against 9.4 per cent in 2011-12.

Industrial output slips 0.4% in September

(Reuters): India's industrial production fell by 0.4 percent in September from a year earlier, a much weaker-than-expected performance.

Analysts polled by Reuters had expected a rise of 2.8 percent in September output. Revised government figures released on Monday showed August output growth was revised down to 2.3 percent from 2.7 percent.

Manufacturing, which constitutes about 76 percent of industrial production, fell by 1.5 percent from a year earlier, the federal statistics office said.

COMMENTARY

SUJAN HAJRA, CHIEF ECONOMIST, ANAND RATHI SECURITIES, MUMBAI

This month's factory output data is a negative surprise. We were expecting a rise of 2.5 percent. But monthly industrial production data is volatile, and it is difficult to give a long-term guidance based on one month's number.

We still maintain our view that there will be some amount of industrial recovery in the second half of the current fiscal year ending in March. For the full year, we expect a rise of 4 percent.

MOSES HARDING, HEAD OF ASSET-LIABILITY MANAGEMENT, INDUSIND BANK, MUMBAI

The trend in growth and inflation is clear; downward pressure on growth and uptrend on inflation into the near term. So, no surprises from the IIP number and it is high time RBI gets into balancing act between growth and inflation.

ANJALI VERMA, ECONOMIST, MF GLOBAL, MUMBAI Typically, some kind of inventory buildup also happens in September, so the numbers are all the more disappointing.

On the other hand, CPI (consumer price inflation) continues to remain high. Going by RBI's guidance, the IIP numbers will now make a strong case for a rate cut to happen in January.

DEVEN CHOKSEY, MANAGING DIRECTOR, KR CHOKSEY SECURITIES, MUMBAI

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