India’s industrial production contracted 4.3%, the steepest since 2011, on the back of a sharp decline in outputs of manufacturing, mining, electricity and even consumer goods of day-to-day use.
The government data, which came after a 14-year low core sector growth numbers, has a wide implication on the country’s overall economic growth figures, which dipped to 5% in the April-June quarter. The July-September quarter numbers are expected at the end of this month.
A weaker-than-expected industrial output data also suggests the Reserve Bank of India will be prompted to give another cut in key policy repo rate to address economic growth concerns when it reviews monetary policy early next month.
While the manufacturing sector declined by 3.9% in September as compared to a growth of 4.8% in the corresponding period last year, the growth of mining fell by 8.5%. Electricity generation output contracted 2.6% in September. A fall in power generation output is another barometer of the slowing economy as it indicates factories do not require electricity as they are not producing enough.
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