India’s Core Sector Output Shrinks 5.8% In October, Lowest In Over A Decade
The output of India’s eight core sectors contracted by 5.8 percent in October, the lowest in over a decade, indicating the severity of economic slowdown in India.
India’s core sector output had expanded by 4.8 percent in October 2018.
Six of eight core industries—coal, crude oil, natural gas, cement, steel and electricity—saw a contraction in output in October. Coal production fell 17.6 percent, crude oil 5.1 percent and natural gas by 5.7 percent, according to government data released Friday.
Production of cement (-7.7 percent), steel (-1.6 percent), and electricity (-12.4 percent) also declined during the month.
The only sector that posted growth in October was fertilisers where production rose by 11.8 percent year-on-year. Growth in output of refinery products slowed down to 0.4 percent in October as against 1.3 percent in the same period last year.
During the April-October period, core sector growth fell to 0.2 percent against 5.4 percent in the year-ago period. Output of these sectors contracted by 5.1 percent in September, the lowest in the decade.
Commenting on the data, ratings agency ICRA Ltd. said based on the unfavourable performance of the core sector, the contraction in the Index of Industrial Production, or IIP, appears set to deepen in October 2019.
"The sharp worsening in the performance of electricity generation and cement in October 2019, offset the sequential improvements in refinery production, fertilisers and coal, resulting in an even deeper contraction of the core sector output in that month," the ratings agency said in a statement.