This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

India Industrial Output Drops For 2nd Month In Dec

By KAY JOHNSON

MUMBAI, India (AP) â¿¿ India's industrial output fell for the second straight month in December, government data showed Tuesday, adding to worries over a marked slowdown in Asia's third-largest economy, now predicted to grow at its slowest rate in a decade.

The production index measuring manufacturing, mining and electricity edged down 0.6 percent in December from a year earlier, more than the November contraction of 0.1 percent, according to the Central Statistics Office.

India's once-bright economic outlook has been dimming recently amid high inflation, weak consumer spending and delays in economic reforms that have chilled investment. Gross domestic product growth has slumped from over 9 percent in early 2011 to a projected growth of only 5 percent for the fiscal year ending in March.

Falling industrial production seemed to back up that pessimistic GDP forecast issued last week by the statistics office, which sparked an unusual controversy within the government, with Finance Minister Palaniappan Chidambaram saying the gloomy outlook is overblown and 5.5 percent growth is still achievable.

Tuesday's negative production figures may increase pressure on Chidambaram to present a pro-growth budget later this month to try to narrow deficits and introduce reforms to make doing business in India less difficult.

The latest signs of stalling growth might also convince the central bank to further reduce its base lending rates to try to stimulate weak consumer demand, although analyst Anjalika Bardalai with the Eurasia Group says stubbornly high inflation remains the bank's primary concern and she doesn't expect another rate cut more than the quarter point that it did last month.

Inflation of 7.2 percent that outstrips growth is hurting consumers, and lower interest rates could worsen the problem, she said. The government's next report on inflation is due Thursday.

Even a full point interest rate drop from the current 7.75 percent would still make borrowing too expensive to encourage businesses to invest more, she said.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG

Markets

Chart of I:DJI
DOW 17,751.39 +121.12 0.69%
S&P 500 2,108.57 +15.32 0.73%
NASDAQ 5,111.7330 +22.5270 0.44%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs