The official data released on Tuesday reveals that the growth of eight key infrastructure sectors has reached a four-month low of 8.1% in September 2023, compared to 8.3% in the same period last year. The growth rate in the production of refinery products, fertiliser, cement, and electricity has slowed down, while the output of crude oil has seen a negative growth. These eight industries account for 40.27% of the Index of Industrial Production (IIP). In May, the growth rate of these sectors was at a low of 5.2%.
The data shows a dip of 0.4% in crude oil output in September, compared to a contraction of 2.3% in the same month last year. In August, the core sector growth reached 12.5%, the highest since June 2022 when it was 13.2%. The output growth of these eight sectors also decreased to 7.8% in April-September 2023-24, compared to 9.8% in the previous year.
In September, coal, natural gas, and steel production experienced a rise of 16.1%, 6.5%, and 9.6% respectively. However, the growth rate in the production of refinery products, fertiliser, cement, and electricity slowed down to 5.5%, 4.2%, 4.7%, and 9.3% respectively, compared to the corresponding figures of 6.6%, 11.8%, 12.4%, and 11.6% last year.
Aditi Nayar, Chief Economist of Icra Ltd, explained that the core sector expansion in September reached a four-month low of 12.5% due to an expected increase in rainfall, with the exception of the growth in fertiliser output. She noted that the growth in cement production decelerated significantly, reaching a six-month low of 4.7% in September. Nayar anticipates that the IIP growth will moderate to high single digits in September, following the trajectory of the core sector.
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