India's industrial output is forecast to have contracted in February by 1 percent from a year earlier, a fourth fall in five months as the global downturn and waning domestic demand sees factories cut production.

Economists expect output to remain subdued despite a series of stimulus measures, and it could be months before a revival is visible. They forecast economic growth to fall to a seven-year low below 6 percent in the fiscal year that started on April 1.

 "We are still at the bottom. We will move up from second half of 2009/10 fiscal year," said D.K. Joshi, principal economist at domestic rating agency Crisil.

Factory output slowed markedly in 2008 as high borrowing costs and later a credit crunch forced firms to delay expansion plans and then cut output as demand for goods fell. In October, industrial output contracted for the first time in 13 years.

The ABN AMRO Bank purchasing managers' index <INPMI=ECI> showed manufacturing shrank for a fourth straight month in February.

Since October, the central bank has aggressively cut its key lending rate by 400 basis points to its lowest level since 2000, and the government has cut duties and increased spending to protect growth and jobs.

"The cut in interest rates and the stimulus impact will start showing up. The growth in infrastructure industries is also not too bad," said N.R. Bhanumurthy, an economist with independent think-tank Institute for Economic Growth.

Last week, Prime Minister Manmohan Singh said the economy could have grown less than 7 percent in 2008/09, slowing sharply from a scorching 9 percent or more in the previous three years.

Forecasts for February industrial output: (Percentage change from a year earlier)
 -----------------------------------------------------
 RESPONDENTS                                 FORECAST
 -----------------------------------------------------
 Institute for Economic Growth                  +1.3
 Bank of Baroda                                        -0.2
 IDBI Gilts                                                -0.5
 Yes Bank                                                -0.8
 Nomura Securities                                    -0.9
 Reliance Equities                                      -1.0
 Centre for Monitoring Indian Economy         -1.2
 Anand Rathi Securities                               -1.8
 Indicus Analytics                                       -2.0
 Crisil                                                        -2.2
 -----------------------------------------------------
 Median                                                    -1.0
 Average                                                  -0.9
 Highest                                                  +1.3
 Lowest                                                   -2.2
 -----------------------------------------------------
 (Reporting by Rajkumar Ray and Surojit Gupta)
 (Additional reporting by Anurag Joshi and Jeanette Rodrigues in MUMBAI; Editing by John Mair)

Source: Reuters UK