India's Industrial Production slows in June

By agencies   |   Thursday, 11 August 2005, 19:30 IST
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NEW DELHI: Growth in India's industrial output probably slowed in June after the nation's biggest oil producers including Indian Oil Corporation closed refineries for repairs. Production at factories, utilities and mines rose 10.1 percent from a year earlier, compared with May's 10.8 percent gain, according to the median forecast of seven economists surveyed by Bloomberg. The Central Statistical Organization is due to release the report tomorrow at noon in New Delhi. Slower industrial output growth may ease pressure on India's Central Bank to raise interest rates at its next monetary policy review on Oct. 25, even as record oil prices threaten to fuel inflation. Output of refined petroleum, which accounts for 15 percent of industrial output, fell in June. ``The central bank may leave interest rates unchanged in October as well to support growth,'' said Pyarelal Raghavan, an economist at the Federation of Indian Chambers of Commerce and Industry in New Delhi. ``The cut in refined petroleum production has constrained industrial production.'' India's Central Bank on July 26 left its overnight borrowing interest rate unchanged at 5 percent to encourage lending and spur growth in Asia's fourth-biggest economy. Since October, the reverse repurchase rate has been the Central Bank's main policy tool because commercial lenders have surplus cash. Indian Oil and Reliance Industries Ltd., owner of the world's third-biggest refinery, produced 1 percent less fuel in June, as some of their units were shutdown for maintenance.