India unemployment rate surges to 16-month high: Economy monitoring center data

India’s unemployment rate rose to a 16-month high in December as job creation in the slowing economy failed to keep pace with the growing workforce.

The overall unemployment rate increased to 8.3 percent, up from 8 percent in November, according to data from the Centre for Monitoring Indian Economy Pvt. Ltd. That’s the highest reading since August 2021.

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The rise in unemployment comes amid a demand slowdown following a robust festive season.

The Indian economy is seen slowing as tighter interest rates dampen demand for goods and services, and exports witness a fall.

Borrowing costs climbed by 225 basis points last year as inflation stayed above the central bank’s target level for most of 2022.

A rise in joblessness is particularly tricky for the government in light of the busy political calendar this year, with elections due to be held in key states, including Karnataka, Madhya Pradesh, Rajasthan and Telangana.

The general elections are due in the summer of 2024, in which Prime Minister Narendra Modi is expected to seek a third term in power.

The urban unemployment rate jumped to 10.09 percent last month from 8.96 percent in November, while rural unemployment fell to 7.44 percent from 7.55 percent, the data showed.

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