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India`s industrial output contracts for first time in nearly 2 years
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India's industrial output contracted for the first time in nearly two years, partly hurt by weak mining activity and lower electricity generation, government data showed on Friday.
Industrial output fell 0.1% year-on-year in August, contrary to economists' expectations of 1.2% growth in a Reuters poll.
The index had previously registered a contraction in October 2022, when it fell 4.1%. Industrial output grew 4.7% in July.
Manufacturing output rose 1% year-on-year, while electricity generation fell 3.7% and mining activity fell 4.3%, the data showed.
The sectors had grown by 10%, 15.3% and 12.3%, respectively, a year ago.
"The marginal contraction in August 2024 is not alarming, as it largely reflects the temporary dousing of mining output, electricity demand and retail footfalls by the heavier than normal rains," said Aditi Nayar, economist at ICRA.
In the April-August period, industrial output growth slowed to 4.2% from a revised 6.2% jump a year earlier.
"Expect growth rates to be better from September onwards with a peak being achieved by October end which would be the post-harvest and festival season," said Madan Sabnavis, economist at Bank of Baroda.
