NEW DELHI: The Index of Industrial Productivity (IIP) plunged to lower than expected levels of 1.8% in December versus 5.9% in December. The IIP grew at 3.6% for the April-December time period.
While the manufacturing sector grew at 1.8% versus 6.6% in November, the capital goods sector growth fell to 16.5% versus -4.6% in November.
The industry has been hurt by rising input costs and slowing demand, partly as a result of 13 interest rate hikes between March 2010 to last October to curb inflation.
The Reserve Bank of India cut the cash reserve requirement for banks by 50 basis points last month, signalling a shift in policy towards reviving growth, but left the repo rate unchanged at 8.5 percent on stubbornly high inflation.
The HSBC Manufacturing Purchasing Managers' Index (PMI) jumped to an eight-month high of 57.5 in January, up from 54.2 in December, as increased domestic and foreign demand pushed factory output to record its biggest one-month increase on record.
Factory output and new orders jumped in December, suggesting the factory sector might be in for better times, components of an earlier PMI showed.
December exports rose an annual 6.7 percent to $25 billion, while imports rose 19.8 percent to $37.8 billion, the government said last week.
Economic growth could slip to 6.9% this year, the government said, the first time this year it has used a number less than 7% in its comments about the economy and eliciting reactions ranging from surprise to vindication to denial.
Finance Minister Pranab Mukherjee, who started the year expecting a growth rate of 9% before progressively scaling down his forecasts, said he was hopeful of an upward revision later.
India's prized investment-grade credit rating is facing pressure due to weak government policy-making, slower economic growth and stubborn inflation, ratings agency Standard & Poor's warned, earlier this week.
(Source- http://economictimes.indiatimes.com)
While the manufacturing sector grew at 1.8% versus 6.6% in November, the capital goods sector growth fell to 16.5% versus -4.6% in November.
The industry has been hurt by rising input costs and slowing demand, partly as a result of 13 interest rate hikes between March 2010 to last October to curb inflation.
The Reserve Bank of India cut the cash reserve requirement for banks by 50 basis points last month, signalling a shift in policy towards reviving growth, but left the repo rate unchanged at 8.5 percent on stubbornly high inflation.
The HSBC Manufacturing Purchasing Managers' Index (PMI) jumped to an eight-month high of 57.5 in January, up from 54.2 in December, as increased domestic and foreign demand pushed factory output to record its biggest one-month increase on record.
Factory output and new orders jumped in December, suggesting the factory sector might be in for better times, components of an earlier PMI showed.
December exports rose an annual 6.7 percent to $25 billion, while imports rose 19.8 percent to $37.8 billion, the government said last week.
Economic growth could slip to 6.9% this year, the government said, the first time this year it has used a number less than 7% in its comments about the economy and eliciting reactions ranging from surprise to vindication to denial.
Finance Minister Pranab Mukherjee, who started the year expecting a growth rate of 9% before progressively scaling down his forecasts, said he was hopeful of an upward revision later.
India's prized investment-grade credit rating is facing pressure due to weak government policy-making, slower economic growth and stubborn inflation, ratings agency Standard & Poor's warned, earlier this week.
(Source- http://economictimes.indiatimes.com)
No comments:
Post a Comment