India's Industrial Production Slows Sharply in May

Manufacturing output rose 3.9%

Hit by rising inflation, high input costs and monetary tightening, India's industrial production slowed sharply in May to its slowest pace in six years, official figures showed July 11. Industrial growth in Asia's second largest economy was at 3.8% in May, against 10.6% in the same month last year.

Manufacturing output rose 3.9% in May against 11.3% for the corresponding period a year earlier.

"The industrial data for May was disappointing. The sharp deceleration raises concerns about the manufacturing outlook for the second half of the year," said Sherman Chan, economist with Moody's"Indias export outlook has become increasingly gloomy, as the global financial market turmoil seems far from over and the U.S. economy is not showing signs of recovery."

Industrial output rose 8.1% in the financial year ending March 2008.

Capital goods growth slumped to 2.5% in May from 22.4% a year ago.

Copyright Agence France-Presse, 2008

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