India output grows nearly 4pc

NEW DELHI: India's industrial output grew by nearly four percent in January from a year earlier, outperforming market expectations, official data showed on Friday. The output growth, boosted by higher exports and manufacturing, shows Asia's third-largest economy is picking up speed despite aggressive monetary tightening aimed at curbing high inflation. The output by mines, factories and utilities expanded 3.8 percent, a nearly full percentage point above market forecasts of a 2.9-percent rise. The numbers marked a sharp pick-up from December, when production expanded just 1.6 percent, the weakest pace in 20 months. The central bank is due to meet next week to decide whether to boost interest rates again in a new bid to tame inflation running at nearly 8.5 percent, far above its tolerance level. The output figures come a day after the government announced India's merchandise exports in February surged by nearly 50 percent from a year earlier to $23.6 billion. They also follow recent figures showing the HSBC Markit Purchasing Managers' Index, an indicator of manufacturing expansion, rose to a three-month high in February. But the latest output data were still down sharply from January 2010, when production soared 16.8 percent as India was pulling out of the global financial crisis and manufacturers were rapidly cranking up activity. Economists cite the high base numbers from a year ago as partly to blame for the recent weaker data.