Factory output growth in April came in at a less-than-expected level of 0.1
per cent, raising fears that economic slowdown is likely to persist in the
first quarter this fiscal.
The industrial growth performance for the month was, however, better than
the previous month when factory output contracted 3.5 per cent.
With the lacklustre factory output growth in April and GDP growth also
slowing down to 6.5 per cent in 2011-12, pressure is mounting on the Reserve
Bank of India to further bring down policy rates at its monetary policy review
meeting on June 18. The markets have already factored in a 25 basis point cut
in policy rates on that day.
Mining, manufacturing weigh
The factory output performance for April 2012, which was released by the
central statistics office today, was weighed down by 3.1 per cent contraction
in mining output and 0.1 per cent growth in manufacturing. Electricity saw 4.6
per cent growth for the month under review.
As per “use-based” classification, there has been negative growth in
intermediate goods (-1.4 per cent) and capital goods (-16.3 per cent). However,
basic goods saw 2.3 per cent growth, consumer durables recorded 5.0 per cent
growth and consumer non-durables registered 5.4 per cent growth.
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