New Delhi: India’s industrial output unexpectedly fell year-on-year in August for the first time in 18 months, as heavy rains hit mining and construction activity, while a slump in manufacturing signaled a broader slowdown.
India’s industrial output fell 0.8% from August 2021, compared to a 1.7% increase in a Reuters survey and a 2.4% increase in July.
“In an unpleasant surprise, IIP (industrial production) contracted in August 2022, with heavy rains curtailing construction activity and power demand,” said ICRA economist Aditi Nair.
Mining output declined by 3.9%, while manufacturing activity declined by 0.7%.
India’s central bank, which has been aggressively tightening its policy to control inflation, which hit a five-month high in September, will have to work harder if activity does not improve in the coming months. can.
“The lower-than-expected IIP growth confirms the volume-based slowdown story, indicating stress among low-income households,” said Saugata Bhattacharya, economist, Axis Bank.
Bhattacharya said India’s economy could be slower than expected at present, given the decline in exports. According to a government data released earlier this month, exports fell more than 3% in September.
Several economists in the past weeks have cut their Indian growth projections for the current fiscal. ,Reuters
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