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Strong Manufacturing Growth In Developing Economies

James Boston
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It is interesting from time to time to keep an eye on the state of manufacturing in some of the world’s less developed economies. In this regard both Mexico and India have this morning published updates to their Industrial Production figures.

The Mexican number has posted a strong year on year gain of 1.6% compared to the previous month’s fall of -0.6%, this is in the context of a market expectation for a rise of 1.8% in the Industrial Production Figure this month. The month on month number has however dropped to 0.1%, this represents a decrease as last month’s reading was 0.6% and the market expected figure was for a 0.3% pick up. The Mexican Central Bank, Banco de Mexico, has also released detail of an interest rate decision it took today, the countries base interest rate is to stay at 3% for another month following a series of cuts that has taken it from 4.5% over the past year and a half.

The Indian Industrial Production number is also on the rise, this reading has been published as 4.7%, this is in comparison to a 3.4% increase the previous month and a market consensus estimate for 3.8% expansion. The month on month Manufacturing Output number has been posted as an increase of 4.80%, this follows a rise of 2.60% during the previous month.

Indian Bank Loan growth remains elevated, the current reading of 13.30% expansion is highly indicative of healthy economic activity in what is the world’s 10th largest economy. The previous reading seen here showed an expansion of 13.90%, which was slightly below the long term average however today’s reading remains somewhat in line and is a welcome sign that the Indian economic expansion remains on track. One further sign of Indian stability improving is the continuation of the gradual increase in Foreign Reserves, it was reported this morning that India now holds the equivalent of INR316.39Bn in US Dollars, this is up from INR315.78Bn on the last report.

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