India industrial output surges

NEW DELHI, October 12, 2009 (AFP) – India’s industrial output surged by a better-than-expected 10.4 percent in August, official data showed Monday, which analysts say could raise pressure on the central bank to hike interest rates. The strong year-on-year figures came on the back of double-digit growth in the manufacturing, mining and electricity sectors.

Analysts were expecting a rise in industrial output of close to 10 percent.

Economists said the robust figures could press the central bank to up rates to control growing inflationary pressures, although most predict no move before January.

India’s industrial performance is expected to help offset the impact on overall economic growth of monsoon rains, which have been the worst in nearly four decades and hurt agricultural output, analysts say.

The data were the latest in a series of encouraging figures pointing to recovery in Asia’s third-largest economy.

Manufacturing production grew by 10.2 percent in August, electricity by 10.6 percent and mining by 12.9 percent.

India’s economic growth has fallen from the annual nine percent-plus levels the country logged for several years before the start of the global financial crisis.

But recent data such