NEW DELHI (AFP) -- Indian industrial output rose 11.1 percent in May, a slowdown from the previous month and year as demand for manufactured goods dropped, official data showed.

The slowdown follows a 13.6 percent gain in industrial output in April, the first month of India's financial year, and an 11.7 percent gain recorded in may 2006. For the year to March 2007, industrial output -- which accounts for a quarter of the economy -- rose 11.3 percent compared to 8.2 percent the previous year, helping the overall economy expand by a faster-than-expected 9.4 percent. The industrial output slowdown follows moves by India's central bank to tame inflation by rising benchmark interest rates nine times since late 2004 to put a dent in demand for credit. The aggressive monetary tightening has brought wholesale inflation down to 4.13 percent, according to the latest figures, from a two-year high of nearly seven percent earlier this year