NEW DELHI: India’s economic woes worsened on Friday with a surprise contraction in industrial production and a wider trade deficit.
Production at factories, mines and utilities shrunk for the second straight month in November, by 2.1 percent, data from the Statistics Ministry showed, dragged down by a contraction in consumer goods output.
“The November industrial production figures continue to show that the Indian industrial sector remains in recession, with clear evidence that domestic consumption remains weak,” wrote Rajiv Biswas, Asia-Pacific chief economist at His.
Meanwhile, the trade deficit widened to $10.14bn last month from $9.22bn in November on waning exports growth, data from the Trade Ministry showed.
Merchandise exports rose 3.49 percent year-on-year to $26.35bn, slowing down from a 5.86 percent pace in November. The second successive fall in the output and slowing exports growth will likely dampen hopes for a rebound in Asia’s third-largest economy.
For the past four quarters, economic growth has been stuck below 5 percent while prices are rising.
The latest data may make investors more wary of committing fresh investments in an economy that recorded 9 percent annual expansion until two years back and was widely expected to be one of the main drivers of the global economic recovery.
Reuters
