India Infrastructure Output Contracts First Time in Over 4 Years

(Bloomberg) -- India’s core infrastructure industries’ output contracted for the first time in more than four years in August, reflecting weak demand in the economy.

The index of eight core infrastructure industries, which comprises output of coal, crude oil, cement and electricity among others, fell 0.5% in August. It had last declined in April 2015.

Key Insights

• The overall output was weighed down by a contraction in coal (-8.6%), crude oil (-5.4%), cement (-4.9%), natural gas (-3.9%), electricity (-2.9%). Steel production expanded 5%, fertilizers by 2.9% and refinery products by 2.6%
• The core infrastructure sector constitutes 40% of total industrial production and the weakness will be a drag on factory output, data for which is due on Oct. 11
• The core data comes few days before the central bank’s monetary policy where it is expected to cut rates for a fifth time to spur growth

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