A laborer working on a construction site/AFP
NEW DELHI, Jul 12 – India’s industrial output growth rebounded by a surprise 2.4 percent in May after shrinking the previous month, data showed Thursday, bringing some cheer after a string of gloomy economic numbers.
The 2.4 percent rise in production by the country’s factories, mines and electrical power plants — while still subdued — beat financial market forecasts of around a 1.8 percent rise.
May’s industrial growth resurgence came after a revised 0.9 percent contraction the previous month and a 3.2 percent shrinkage in March.
The production rise was spurred by stronger manufacturing output and came despite a slippage in exports during the month.
May’s production was still sharply below the nearly 10 percent annual growth in average annual monthly industrial output before India’s economy began to lose steam in the last financial year.
An aggressive series of domestic interest rate increases to counter stubborn inflation along with a deteriorating world economy has undermined the once booming economic giant.
The output figures come after Premier Manmohan Singh, who has taken charge of the finance portfolio, said he would push to restore the “animal spirit” of the economy.
The latest output numbers could ease pressure on India’s central bank to cut interest rates to boost stumbling growth.
The central bank has said it has limited room to reduce rates with inflation still running at over 7.5 percent.
The central bank holds its next monetary policy review session at the end of July.
