July 2019: Core Sector Growth Slows to 2.1%

India’s core sector output remained weak in July, with growth slowing to 2.1% from a year earlier, as production of coal, crude oil, natural gas and refinery products declined.

While growth as recorded by the Index of Eight Core Industries was higher than an over four-year low of 0.2% in June, it was lower than 4.4% recorded in July 2018.

The eight core industries of coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity, which have a 40.27% weight in the Index of Industrial Production, grew 3% in the April-July period compared with 5.9% in the year-ago period.

Last week, official data showed India’s GDP expanded at 5% in the first quarter, the slowest pace in over six years.

Coal and crude oil output declined by 1.4% and 4.4%, respectively, in July from a year earlier, while natural gas and refinery product output fell by 0.5% and 0.9%, respectively. Cement output increased by 7.9% and steel production increased by 6.6%, the commerce and industry ministry said.

The RBI has already cut interest rates by 110 basis points this year. One basis point is one-hundredth of a percentage point.

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