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India: Industrial production grows at fastest rate in over a year in November

Staff Writer |
Industrial production in India surged in November, growing at the fastest pace since October 2015. Industrial output expanded 5.7% compared to the same month of 2015, which contrasted October’s 1.8% rise.

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The print notably overshot market analysts’ expectations of a subdued 1.5% expansion, partly as a result of the government’s demonetization program.

November’s result was driven chiefly by a rebound in manufacturing output, which increased 5.5% annually, contrasting the 2.4% contraction in October.

In addition, electricity output grew 8.9% after posting weaker growth of 1.1% in October, while mining output expanded 3.9% (October: -0.7% year-on-year).

On a use-based classification, the production of capital goods increased notably. Consumer goods and basic output also picked up pace, while the production of intermediate goods grew steadily.

As a result of the positive reading, the trend pointed upwards after the steady decline seen in past months. Annual average variation in industrial production swung from minus 0.5% in October to plus 0.3% in November.

FocusEconomics panelists expect industrial production to increase 5.2% in fiscal year 2016, which is down 0.3 percentage points from last month’s forecast.

For fiscal year 2017, the panel expects industrial output to expand 6.1%.

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