NEW DELHI: India's industrial output grew at its weakest pace in 20 months in December, expanding just 1.6 percent from a year earlier, data showed Friday, stoking concerns the economy may be slackening.
The slower-than-expected growth comes after seven interest rate hikes in less than 12 months to tame inflation in Asia's third-largest economy.
The December industrial output numbers are "disappointing," said Finance Minister Pranab Mukherjee.
Analysts had expected output from mines, factories and utilities to grow by two percent.
India's weak performance contrasted with neighbouring emerging market giant China's industrial output, which expanded by 13.3 percent in the fourth quarter of 2010.
Manufacturing output, which accounts for 80 percent of India's industrial output index, rose a scant 1.0 percent in December, down from 19.6 percent a year earlier.
The government revised upwards November's industrial production to 3.62 percent from a previous figure of 2.7 percent.
The low December figure can partly be attributed to the high base figure of a year ago, but still marks a significant gearing down of momentum from earlier months.
In October, industrial output was up 11.0 percent from the previous year.
The soft data poses a dilemma for the Indian central bank, which has been expected to hike interest rates again soon to tame food inflation running at 13.1 percent and overall inflation, which stands at 8.43 percent.
India's economy is forecast to grow by 8.6 percent in the current fiscal year to the end of March, the government said earlier in the week, beating the previous year's expansion of 8.0 percent.
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