June factory output seen rising for third month

June factory output seen rising for  third month

Industrial production in India probably expanded for a third consecutive month in June driven mainly by solid growth in infrastructure output, a Reuters poll showed.

Factory output in June likely rose 5.4 per cent from a year earlier, faster than the 4.7 per cent growth in May, according to a poll of 27 economists.

“India’s core sector growth touched 7.3 per cent year on year in June supported by a significant pick-up in electricity, cement and coal production,”  said Rupa Rege Nitsure, chief economist at Bank of Baroda.

The infrastructure sector accounts for almost 40 per cent of India’s industrial output.If confirmed, this would be the strongest expansion in industrial production in 19 months, welcome news for the newly-elected government led by Prime Minister Modi.

Economists in the poll also predicted that July inflation would be almost unchanged from a month earlier even as weak monsoon rains and political turmoil in Iraq were expected to push food and fuel prices up significantly. Wholesale price inflation likely eased to 5.10 per cent from 5.43 per cent the month.

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