NEW DELHI: India’s economy continued to report deepening signs of a slowdown with October factory production figures contracting as much as 3.8%, dragged by manufacturing which shrank 2.1% as well as power and mining, which declined even more.
Government data also showed retail inflation shot up to a 40-month high of 5.54% in November, inching closer towards the psychological mark of 6%.
Factory output, measured in terms of Index of Industrial Production, had expanded 8.4% in October last year. The latest numbers represent the third straight month of contraction in a row. IIP had fallen 4.3% in September and 1.4% in the previous month.
“The breakdown showed the slump in capital goods production worsened which suggests that investment growth remained weak at the start of Q4,” said Mark Williams, Chief Asia Economist for Capitaleconomics.
According to the data released by the government, capital goods output shrank by 22%, while the manufacturing sector declined 2.1% in October compared to 8.2% robust growth in the same period last year.