A whopping 8.2 percent uptick in industrial production in October may seem like a sign India's economy is poised for a turnaround, but the devil is in the details, says the Wall Street Journal.
As GlobalPost reported, India's industrial output rose 8.2 percent in October, beating expectations of just 4.5 percent forecast by a Reuters poll of analysts.
But according to the WSJ, the real reason for the boost has to do with how the Diwali holiday fell on the calendar in 2011 and 2012.
"India’s festival period started in November while it took place in October last year," the paper notes. "Since production for the festival period tends to ramp up a month ahead of the festivities, festival-related production took place in September 2011 and in October this year. So the index in October 2011 was 158.3, down by nearly 4% from the month before."
But that's not the only reason for skepticism about a pending comeback.
According to the Journal, "this one month masks the anaemic growth in previous months. In fact, in five of the seven months between March and September, the index contracted – a clear indication of manufacturers’ reacting to falling demand by curtailing production and using up inventory. This is reflected in gross domestic product data."