India’s industrial output grows at surprisingly slow 3.4% in June

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India said on Tuesday (Aug 12) industrial output expanded by an unexpectedly slow 3.4 per cent in June from a year earlier while inflation accelerated, dimming prospects of a quick economic recovery.

The growth in output by India’s mines, factories and utilities marked the third straight month of industrial expansion in Asia’s third-largest economy. But the 3.4-per cent annual growth in June undershot market forecasts of a 5.2-per cent rise and was lower than the 4.7 per cent increase logged in May.

In other bad news for the new right-wing government, hoping to steer the country out of its longest period of sub-five per cent growth in a quarter-century, consumer price inflation also picked up pace.

Consumer prices rose 7.96 per cent in July from a year earlier, far above the six-per cent target set by the hawkish central bank and exceeding the previous month’s revised 7.46-per cent rise. The higher-than-expected consumer inflation means that the central bank will have less room to ease high interest rates to spur economic growth.

The economy grew by 4.7 per cent in the financial year to March 2014, its second consecutive year of sub-five-per cent growth.

The Bharatiya Janata Party government led by Prime Minister Narendra Modi that took power in late May has been hoping to see “green shoots” of recovery. Modi won the biggest parliamentary majority in three decades after campaigning on a platform to revive the economy.

Some economists have warned that it will take time for companies to ramp up expansion plans and for consumers to regain confidence. Still, economists are hoping that an upturn in the global economy will create more demand for Indian exports.

Modi also has been seeking to sweep away bureaucratic and other hurdles to foreign investment that is urgently needed to upgrade dilapidated ports, roads and other infrastructure.

 

 

 

 

Source : Channel News Asia | August 12, 2014

Thomas D’Innocenzi

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About thomasdinnocenzi

Thomas D’Innocenzi is a highly accomplished, results-focused international consultant with extensive experience in global sourcing and business development worldwide to meet evolving business needs. Tom has proven ability in implementing and managing profitable global marketing and sourcing operations. He has extensive experience in international business development to accommodate rapid growth. Skilled in building top-performing teams, bench-marking performance, and developing organizations to improve efficiency, productivity, and profitability. Experienced transition leader and change agent. Tom founded Nova Advisors with the mission of providing expert Global Business Development consulting services for companies seeking to expand their market share as an independent consultant. Tom has a network of experts and advisors throughout the Asia-Pacific region and North America. His expertise includes business development, global sourcing, manufacturing, commodities, logistics, QA/QC, FDA, regulatory compliance, sustainability, and supply chain optimization. Tom is experienced in the medical device, apparel, consumer goods and technology services verticals helping companies advance their global sourcing capabilities and develop new markets through a local and sustained approach. Located in SE Asia and the United States, Tom expands market reach to drive sales. His global sourcing strategy includes directly negotiating with commodity suppliers, supply chain networks and distributors for optimal terms based on his expertise and first-hand knowledge of the players. Contact Tom to use his consulting service to increase your global market and make global sourcing profitable for you in the Asia Pacific Region and the United States. http://www.NovaAdvisors.com thomas@NovaAdvisors.com USA Direct: +1.904.479.3600 SINGAPORE: +65.6818.6396 THAILAND: +662.207.9269
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