India July Industrial Production Growth Below Forecast

(RTTNews) - India's industrial production growth in July was much weaker than economists' expected, figures from the Central Statistics Office showed Friday.

The industrial production index rose just 0.5 percent year-on-year, which was much less than the 1.8 percent increase forecast by economists. In June, production grew 3.9 percent, revised from 3.4 percent.

Manufacturing output declined 1 percent annually, while mining production rose 2.1 percent. Electricity output grew 11.7 percent.

During the April to July period, industrial production rose 3.3 percent from a year ago.

India's manufacturing sector expanded for the tenth consecutive month in August, but the pace of growth slowed from July's 17-month high, the purchasing managers' survey data from Markit Economics showed early this month.

That said, the economy grew 5.7 percent in the April to June quarter, which was the strongest pace in two years. The manufacturing sector rebounded with 3.5 percent growth.

The country's newly formed government, led by Prime Minister Narendra Modi, aims to achieve growth in the range of 7-8 percent within the next three to four years and bring the fiscal deficit down to 3 percent of the GDP.

Separate data release today showed that India's inflation based on the consumer price index, slowed marginally in August.

The consumer price index advanced 7.8 percent year-on-year in August from last year, following a 7.96 percent rise in July, the statistical office said. Consumer prices were forecast to rise by 7.83 percent.

The Reserve Bank of India aims to bring consumer price inflation down to 8 percent by January 2015 and to 6 percent by January 2016.