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Friday, May 09, 2008

India Industrial Output March 2008

India's industrial production grew at the slowest pace since 2002 in March as borrowing costs at a six- year high discouraged consumers from buying cars and motorcycles. Production at factories, utilities and mines rose 3 percent from a year earlier after gaining 8.6 percent in February, the statistics office said in New Delhi today.

The fastest inflation rate in three years is preventing the central bank from lowering the central bank's 7.75 percent benchmark lending rate, weighing on companies who rely on domestic consumers for their business.

Part of the slowdown may be the result of an unfavorable base effect caused by the index rising to a record in March 2007, and the year on year rate in March last year was 14.77%, which was an "all year" high.

Manufacturing, which accounts for about 80 percent of India's industrial production, gained 2.9 percent in March, compared with a 16 percent increase a year ago, according to today's report. Electricity output rose 3.7 percent, mining grew 3.8 percent and consumer goods production fell 0.1 percent.

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