Output of eight core infrastructure industries contracted by 5.2% in September, indicating the severity of the economic slowdown.
As many as seven of eight core industries saw a contraction in output in September. Coal production fell steeply by 20.5%, crude oil by 5.4%, and natural gas by 4.9%. Output of refinery products (-6.7%), cement (-2.1%), steel (-0.3%), and electricity (-3.7%) too declined.
Sole growth sector
The only segment to post growth in September was fertilizers, where production increased by 5.4%.
The eight core sectors expanded by 4.3% in September 2018, according to official data released on Thursday. During the April-September period, the growth of core industries slowed to 1.3%, against 5.5% in the year-earlier period. “This clearly indicates the severity of the ongoing industrial slowdown,” India Ratings and Research said.
ICRA expects the Index of Industrial Production (IIP) to report a contraction of 2.5-3.5% in September. “In particular, the YoY decline in the output of coal, crude oil and natural gas, is likely to weigh upon the performance of the mining index of the IIP in September. Manufacturing may report a year-over-year contraction in September,” it added.
Earlier this month, the RBI cut its GDP growth forecast for the current fiscal to 6.1% from the previous estimate of 6.9 % after the first-quarter economic growth slipped to over six-year low of 5 %.