Summary India's industrial output grew by a slower than-expected 2 % in Sept from a year earlier.
NEW DELHI (AFP) - India s industrial output grew by a slower- than-expected two percent in September from a year earlier, hit by weak demand during the normally high-spending religious festival season, data showed Tuesday.
The increase undershot consensus market expectations of a 3.5-percent rise and was a far cry from the double-digit increases India enjoyed for large parts of the last decade when the economy was booming.
Hopes of a big ramping-up of production for India s religious festival season, when it is considered auspicious to buy everything from cars to gold to electronic appliances, failed to materialise.
Manufacturing output, which accounts for over three-quarters of the Index of Industrial Production, rose a scant 0.6 percent in September from a year earlier.
Production of capital goods such as factory equipment -- a key signal of investment intentions -- tumbled by a massive 6.8 percent from a year earlier.
"Industrial activity in India remains weak, reflecting the parlous state of domestic confidence and demand," said Moody s Analytics in a note to clients.
"Demand for consumer durables and capital goods is still soft, mirroring poor consumer and business confidence," the research house added.
Exports have picked up on the back of a depressed rupee, climbing 13.67 percent to $27.27 billion in September from a year earlier, figures Monday showed,
But economists say higher overseas sales can only help the economy at the margins since growth in the nation of 1.2 billion people is still mainly domestically driven.
Despite calls by business to boost the economy, the central bank last month raised its key lending rate for a second time in as many months to try to curb inflation.
The weak output data came as separate figures showed that consumer price inflation last month crossed 10 percent.
Consumer price inflation, increasingly watched by economists along with the main Wholesale Price Index, climbed to 10.09 percent in September from 9.84 percent a year earlier.
The rate fuelled expectations of another interest rate increase, economists said.
