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BW Businessworld

The Age Of Decline?

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If the currency shock wasn't enough, the index of industrial production (IIP) fell 3.5 per cent — much more than expected in March. Sure, it was going to slow (estimates put it at 1 per cent or so in March over the previous year, compared to February's 4.1 per cent).

For FY2012, industrial output grew by 2.8 per cent compared to 8.2 per cent in FY2011; the reversal is stark.

Manufacturing constitutes over 75 per cent of the IIP, and that fell by 4.4 per cent compared to the previous year. Capital goods output fell by a whopping 21 per cent, reflecting the slowing pace of investment.

But if you look at the monthly momentum or three-month moving averages (there was a big base effect in February's numbers), the trend could be along expected lines. The outlook for April, as measured by the PMI, suggests an uptick or positive momentum. Or you could blame the lack of reliability of the data.

Strictly Business
The government of Spain has taken over Bankia,one of the country's biggest banks. Bankia, which holds €32 billion in distressed property
assets, will have a €4.47-billion loan by the Spanish bailout fund converted into shares.

(This story was published in Businessworld Issue Dated 21-05-2012)