Indian industrial output rises 16.7pc
Sunday, 14 March 2010
NEW DELHI, Mar 13 (Bloomberg): India's industrial production rose 16.7 per cent in January, diminishing spare capacity and contributing to inflationary pressures that may spur the central bank to raise interest rates within weeks.
The expansion in output at factories and mines, announced by the statistics department in New Delhi today, came after a revised 17.6 per cent gain in December from a year earlier, the fastest pace since at least 1994, according to Bloomberg data. India's inflation rate may touch a 16-month high of 9.67 per cent in February, the median estimate of 16 economists in a Bloomberg News survey showed. The inflation data is due March 15.
India and China, the world's fastest-growing major economies, may withdraw more stimulus steps as stronger consumer demand stokes inflation. India's inflation rate could surge to "double digits," central bank Deputy Governor Subir Gokarn said yesterday, pushing bond yields toward a 17-month high.
"Inflation is a much bigger risk in India than in China," said Sonal Varma, a Mumbai-based economist at Nomura Holdings Inc. "India may tighten monetary policy aggressively." Varma expects the Indian central bank to raise rates by as much as 50 basis points in the next monetary policy statement on April 20.
The expansion in output at factories and mines, announced by the statistics department in New Delhi today, came after a revised 17.6 per cent gain in December from a year earlier, the fastest pace since at least 1994, according to Bloomberg data. India's inflation rate may touch a 16-month high of 9.67 per cent in February, the median estimate of 16 economists in a Bloomberg News survey showed. The inflation data is due March 15.
India and China, the world's fastest-growing major economies, may withdraw more stimulus steps as stronger consumer demand stokes inflation. India's inflation rate could surge to "double digits," central bank Deputy Governor Subir Gokarn said yesterday, pushing bond yields toward a 17-month high.
"Inflation is a much bigger risk in India than in China," said Sonal Varma, a Mumbai-based economist at Nomura Holdings Inc. "India may tighten monetary policy aggressively." Varma expects the Indian central bank to raise rates by as much as 50 basis points in the next monetary policy statement on April 20.