India's Industrial output grows 2.7 percent in Jan, manufacturing output at 2.3 percent

India’s industrial output in January grew to 2.7 percent from a (-) 0.4 percent in December and (-) 1.5 percent in January last year, amid signs that demonetisation and restricted cash access continued to hurt production activity in thousands of factories. 

The manufacturing sector, which accounts for more than 75 percent of the index of industrial production (IIP), grew 2.3 percent in January compared to (-) 2 percent in December and (-) 3 percent in January last year. 

The latest factory output data has come  barely ten days after government forecast India’s “real” or inflation-adjusted gross domestic product (GDP) will likely to grow at 7.1 percent in 2016-17, running counter to analyst projections that had forecast a sharp deceleration in the broader economy because of demonetisation. 

Factory output measured by the IIP is the closest approximation for measuring economic activity in the country’s business landscape.

Also Read: Demonetisation Impact: IIP contracts to 4-month low of 0.4 per cent in Dec, 2016