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Asia factory output weak, India defies with rise

Discussion in 'World Economy' started by Green Hornet, Jan 2, 2012.

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  1. Green Hornet

    Green Hornet FULL MEMBER

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    MUMBAI: Asian factory output remained weak in December, with Chinese manufacturers narrowly avoiding contraction and South Korea's industrial production shrinking the most in almost three years, while Europe data this week is expected to point to a recession.

    India, however, saw strong factory activity in December that defied recent weakness in Asia's third-largest economy.

    Meanwhile, housing and jobs data from the United States last week showed the world's largest economy gaining momentum heading into the New Year.

    INDIA MANUFACTURING SURGES

    India, with its soaring inflation and dramatic slowdown in growth in recent months, may see an end to the central bank's long-running policy tightening.

    The country's manufacturing activity surged to a six-month high in December, helped by a spike in factory output and new orders.

    The HSBC Markit India Manufacturing PMI jumped to 54.2 from 51.0 in November, its biggest monthly rise since April 2009. The index has stayed in growth territory for 33 months now. The PMI came closest to suggesting a contraction in September when it dipped to 50.4.

    Official data released last month showed industrial output in India plunged 5.1 percent in the year to October, its steepest fall since March 2009, raising fears the economy might be heading for a hard landing.

    The Indian economy is facing strong headwinds this year as the euro zone crisis drags on and Reuters polls suggest the central bank will ease monetary policy by June to counter this, despite stubbornly high inflation.

    "From here on, we could expect reversal of monetary tightening. But it's difficult to say when that will take place and in what shape it will roll out," Reserve Bank of India Governor Duvvuri Subbarao told the BBC, reiterating the view spelled out by the RBI at its policy review last month.

    Asia factory output weak, India defies with rise - The Times of India
     
  2. Manmohan Yadav

    Manmohan Yadav Brigadier STAR MEMBER

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    RBI has hinted that interest rates will be lowered this year on
    Industrial, Home and Car Loans.
    Since, RBI pursues a growth oriented policy this year,
    Job market will be on the rise this year.
     
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