India factory output boosted by festive season demand
- 12 December 2012
- From the section Business
India's industrial output rose more than expected in October, boosted by increased demand during the festive season in the country.
Factory output rose 8.2% from a year earlier. Most analysts had forecast a rise of 4.5%.
Manufacturing activity, which accounts for almost two-thirds of overall output, rose 9.6% from a year earlier.
Analysts said the data was also helped by a low base and did not indicate a recovery in India's economy.
Industrial production had dipped 5.1% during the same month last year.
"It's a positive surprise, but bear in mind the jump is distorted by last year's low base, and this is going to reverse in November," said Rajeev Malik, a senior economist with CLSA.
Mr Malik explained that the festival of Diwali, which is traditionally associated with a surge in consumer demand in India, was celebrated in October last year and in November this year.
Factories mostly manufacture and ship their goods ahead of the festival, and as a result, there had been a fluctuation in demand during the respective months.
"The real, credible assessment will be possible only after the November data," Mr Malik said.