Indian industrial output falls

NEW DELHI -Agence France-Presse

India’s industrial output unexpectedly shrank in March by 3.5 percent as Asia’s third-largest economy was hit by declining domestic demand and falling exports, official data showed May 11.

Growth in manufacturing, mining and electricity output from a year earlier sharply undershot consensus expectations of a 1.5-percent rise.The data marked a significant turnaround from February’s 4.1-percent output increase and the 9.4-percent rise logged in the same month a year earlier.

The contraction was another sign of the slowdown gripping India’s economy, fed by weakening global and domestic demand. he key manufacturing sector shrank by 4.4 percent in March in contrast to an 11-percent rise in the same month a year earlier.

India’s central bank cut interest rates for the first time in three years in March in a bid to spur economic growth but has said scope for further reduction in borrowing costs was restrained by still strong inflationary pressures. The government has forecast 7.6-percent growth for the current fiscal year to March 2013, up from an estimated 6.9 percent last year.