- POSTED: 12 Jun 2014 22:17
- UPDATED: 12 Jun 2014 22:20
India's industrial production jumped in April, beating market forecasts in another positive sign for new Prime Minister Narendra Modi who has pledged to revive the faltering economy, data showed on Thursday.
NEW DELHI: India's industrial production jumped in April, beating market forecasts in another positive sign for new Prime Minister Narendra Modi who has pledged to revive the faltering economy, data showed Thursday.
Output grew 3.4 percent year-on-year in April after contracting for the past two months, driven mainly by increases in the manufacturing, mining and power sectors, government data showed.
Manufacturing grew 2.6 percent, while output of capital goods such as plant equipment, a harbinger of future investment, increased 15.7 percent.
"Today's figures on Indian industry were the most positive in many months," chief Asia economist Mark Williams from Capital Economics said in a note.
Modi vaulted to power last month after a landslide election victory over the left-leaning and scandal-plagued Congress party, with a promise to reform the sluggish economy growing at under five percent.
The right-wing Modi has pledged to rebuild India's manufacturing sector, overhaul crumbling infrastructure and bring back foreign investors.
In a boost for the new government, figures released on Wednesday showed India's exports jumped to a six-month high.
The latest figures beat forecasts of around a 2.0 percent growth, but analysts expressed a note of caution.
"These data are volatile though and don't yet provide convincing evidence that the sector has finally turned a corner," Capital Economics' Williams said.
"Meanwhile, consumer price inflation remains high."
Separate figures on Thursday showed consumer price inflation cooled to 8.28 percent in May from 8.59 percent in April year-on-year, but still among the highest rates globally.
Food inflation fell slightly to 9.56 percent in May from 9.66 percent in April.
The figures give the central bank's chief Raghuram Rajan minimal scope to cut interest rates to stimulate the economy.
Rajan has insisted that curbing inflation is key to a sustained economic recovery.
The economy has been stuck in a low gear, growing by 4.7 percent year-on-year in the 12 months to March 2014 -- the second consecutive year of sub-five percent expansion.
The change in government has sparked an investor buying spree on the Indian stock exchange, on expectations of an impending turn-around in the economy.