India's Industrial Production Declines for the First Time in Two Years
India's industrial production has experienced a significant downturn, marking its first decline in nearly two years. According to reports from Bloomberg, the country's industrial output fell by 0.1% in August compared to the same month last year, following a growth of 4.7% in July. This unexpected drop comes as a surprise to economists, who had anticipated a 1% increase in industrial production.
The statistics ministry's report aligns with other indicators reflecting a slowdown in India's economy, which has been touted as the fastest-growing major economy in the world. Surveys of purchasing managers in September revealed a deceleration in both the services and manufacturing sectors. Additionally, an index tracking the output of eight core industries—including steel, coal, and cement—decreased by 1.8% year-on-year.
Mixed Outlook for India's Economic Growth
Despite the recent downturn in industrial production, the overall economic outlook for India remains mixed. After achieving a remarkable growth rate of over 8% in the fiscal year ending March 2024, economists have begun to adjust their GDP growth forecasts for the current fiscal year. A Bloomberg survey indicates an expected growth of 6.9%, while some financial institutions, including Goldman Sachs, predict a more conservative estimate of 6.5%. In contrast, the Reserve Bank of India has maintained a more optimistic growth forecast of 7.2%, suggesting a potential recovery in the coming months.
