Core Sector Output Hits Eight-Month Low Amid Crude Oil, Fertilizer Slump

The recent data indicates a slowdown in the growth rate of key infrastructure sectors, reaching an eight-month low of 0.5% in April. This decline is attributed to negative growth in crude oil, refinery products, and fertiliser production, as per the official figures released on Tuesday.

While these sectors, including coal, crude oil, and cement, previously expanded by 6.9% in April 2024, their output has visibly slackened, marking only a 4.6% increase in March this year. Furthermore, analyses indicate a decrease in coal, natural gas, and electricity production rates, offset by a rise in cement production, up 6.7% from the negligible increase last year.

Economist Aditi Nayar from ICRA Ltd provided insights, noting the significant deterioration of the core sector's performance. Based on current trends and high-frequency indicators, ICRA expects industrial production to moderate sharply to around 1% growth for April. The eight core sectors contribute a substantial 40.27% to overall industrial growth, highlighting their critical impact on the economy.

(With inputs from agencies.)