NEW DELHI, December 12, 2008 (AFP) – India’s industrial growth unexpectedly shrank for the first time in 15 years, data showed Friday, hit by the widening global recession that has weakened demand in Asia’s third-largest economy.
Industrial production contracted by 0.4 percent in October after expanding by 12.2 percent in the same month a year earlier, government figures showed. Output grew by a revised 5.45 percent in September.
Industrial production has been falling in Asia’s third-largest economy as a result of the worldwide economic downturn but analysts had been expecting output growth in October of at least two percent.
“The industrial sector and indeed the economy as a whole has been softening for some time and the situation is deteriorating more rapidly now,” said HSBC economist Robert Prior-Wandesforde.
Until recently India believed it would escape the brunt of the global financial turmoil thanks to its vast domestic market of more than 1.1 billion people and relatively small exposure to world trade.
But a slew of data has shown its economy fast losing steam.
Output turned negative as Indian companies worked off inventories built up in anticipation of October’s normally free-spending religio