IIP growth almost flat at 9.8%
The country’s industrial production in June grew at the slowest pace in last eight months at 9.8% though marginally up from 9.7% in June, 2006. It is the first time annual growth had fallen below 10% since last October, and analysts said the impact of five increases in official interest rates between June 2006 and late March and the rise of the rupee was starting to be felt. Manufacturing, which makes up about 15% of gross domestic product and nearly 80 % of industrial output, rose 10.6 % in June from year earlier. Experts said the growth momentum of previous year could have withered away and lagged effect of interest rate increases and slowdown in exports was begining to show up. Mining was down to 3.6% in June 2007 from 4.7% in June 2006 while electricity sector grew by 6.8% in June 2007 compared to 4.9 in the month year ago.While capital goods grew by 29% compared to 21.9% in June, 2006, consumer durables which recorded a growth of just 0.6% and 5.4% respectively in June, 2007 against 19.9% and 1.8% . The overall growth in consumer goods was 4.2% against 6.1% in June, 2006. Metal products and parts, except machinery and equipment showed a negative growth of 7.7%, in June 2007.