India's industrial output slowed in May and came in well below analysts' expectations, official figures showed Friday, suggesting further measures might be needed to boost investment in Asia's third-largest economy. Production at India's factories, mines and utilities, grew only 2.7 percent in May from a year earlier, lower than a revised downwards figure of a 3.4 percent increase in April.
A survey of 32 economists by Bloomberg had predicted that industrial output would rise four percent, marginally short of the 4.1 percent initially recorded in April, but a fall in consumer goods dragged the rate down. "It's certainly lower than I expected and a bit of a concern but we shouldn't read too much into one month's number given that the figures can be quite volatile," Arun Singh, senior economist at Dun & Bradstreet, told AFP.
"Our expectations are that industrial production will continue to grow and a couple of months from here we think you will be able to see the government's initiatives starting to show some signs of taking effect on the ground." Indian Prime Minister Narendra Modi came to power last year pledging to revive the economy and boost foreign direct investment. In May, India posted growth of 7.5 percent for the first three months of the year, overtaking China's rate.