India's Industrial Output Still Sluggish In June

India's industrial output growth accelerated slightly in June. Output at factories, utilities and mines rose 5.4 percent from a year earlier after a revised 4.1 percent gain in May, according to data fromthe Central Statistical Organisation.




What this means is thatIndia's industrial production grew 5.2 percent in the quarter ended June 30, almost half the 10.3 percent pace in the same period a year earlier, and this will almost certainly be an important negative for Q2 GDP growth. Factory output growth may well slow further in coming months following interest rate and cash reserve increases from the central bank.

Manufacturing, which accounts for about 80 percent of Indian production, gained 5.9 percent in June, compared with 9.7 percent in June 2007. Electricity output rose 2.6 percent in June from 6.8 percent in a year-ago, mining grew 2.9 percent from 1.5 percent and consumer-goods production increased 10 percent.