India's Core Sector Growth Decelerates to 3% in September
India's eight core sectors experienced a slowdown in growth to 3% year-on-year in September, down from 6.3% in August. Steel showed strong growth at 14.10%, while cement remained steady at 5.30%. Electricity and fertilizer sectors slowed, and crude oil, coal, natural gas, and refinery products showed negative growth. The slowdown was attributed to declines in crude oil and coal production, with environmental factors like excessive rainfall impacting output. Despite the September deceleration, the core sectors achieved a 2.9% cumulative growth in the first half of the fiscal year.
*this image is generated using AI for illustrative purposes only.
India's eight core sectors, which serve as key indicators of economic activity, experienced a slowdown in growth during September, according to recent data. The growth rate decelerated to 3% year-on-year, a significant drop from the 15-month high of 6.3% recorded in August.
Sector-wise Performance
The slowdown was primarily attributed to declines in crude oil and coal production, reversing their positive growth trends from the previous month. Here's a breakdown of the performance across the eight core sectors:
| Sector | Growth Rate (YoY) | Change from August |
|---|---|---|
| Steel | 14.10% | Strong growth |
| Cement | 5.30% | Steady |
| Electricity | 2.10% | Halved from 4.1% |
| Fertilizers | 1.60% | Slowed from 4.6% |
| Crude Oil | -1.30% | Reversed to negative |
| Coal | -1.20% | Reversed to negative |
| Natural Gas | -3.80% | Negative growth |
| Refinery Products | -3.70% | Negative growth |
Impact and Contributing Factors
The eight core sectors represent 40.27% of the Industrial Production Index, making their performance crucial for assessing overall economic health. Despite the September slowdown, these sectors achieved a cumulative growth of 2.9% in the first half of the fiscal year.
Environmental factors played a significant role in the reduced output of certain sectors. Excessive rainfall and floods during this period particularly impacted coal production and electricity generation.
Outlook
While the September data shows a deceleration, it's important to note that some sectors, particularly steel and cement, maintained robust or steady growth. This mixed performance across sectors suggests a complex economic landscape that warrants continued monitoring.
The core sector data serves as a valuable indicator for policymakers and analysts in assessing the broader economic trends and potential areas for intervention or support in the coming months.
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