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Capital goods, electricity generation support industrial
growth
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Rising interest rates, slow global demand a concern
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Textile, leather goods output shrink in January
(Adds sector by sector details throughout, graphic)
By Manoj Kumar
NEW DELHI, March 10 (Reuters) - India's industrial
output rose a bigger than expected 5.2% in January compared with
the same month last year as strong domestic urban demand boosted
electricity generation and manufacturing, despite weakening
exports.
Analysts in a Reuters poll had predicted an increase of 5%
in industrial output for the month. The rise followed upwardly
revised annual growth of 4.7% in December, according to the
Ministry of Statistics data.
Some economists expect industrial output growth to remain
strong following a recovery in rural demand as reflected in
rising sales of autos including motor-bikes and scooters.
India's industrial output, comprising production by
factories, electricity generation and mining, has been impacted
by slowing global demand and rising interest rates in recent
months.
Manufacturing, which accounts for about 15% of the Indian
economy, has also been hit by a fall in exports but rose 3.7%
year-on-year overall in January.
India's merchandise exports in January fell 6.6% year-on-year to $32.91 billion. The Reserve Bank of India has raised its benchmark interest rate by 250 basis points since last May to contain inflation, pushing up borrowing costs for consumers and businesses. Capital goods production, a proxy for factory activity, rose 11% year on year, accelerating from a 7.6% rise the previous month, while consumer durables' production contracted 7.5% year-on-year after a 10.4% contraction the previous month, the data showed, reflecting a continuing slowdown in consumer demand. Production of textile garments, tobacco products, basic metals and chemicals contracted between 7% and 30% in January from a year earlier, data showed, while mining output rose 8.8%, slower than 9.8% growth the previous month. India's total passenger vehicle sales grew 11% in February from a year earlier, separate data released by the Society of Indian Automobile Manufacturers (SIAM) on Friday showed. India's economy, the world's fifth-largest, grew 4.4% year-on-year in the fourth quarter, down from 6.3% the previous quarter, and the government expects the economy to post annual growth of 7% for fiscal 2022/23 ending this month. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ India's industrial output on the rise ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Manoj Kumar and Shivangi Acharya; editing by John Stonestreet and Hugh Lawson)
