Output growth of key infrastructure sectors slowed in June, suggesting further weakening of industrial growth and making a stronger case for interest rate cuts and more reforms to spur investments.
The core sector index, which measures output of eight infrastructure industries, rose 3% year on-year in June, slower than 4.4% growth recorded in May.
The index has 38% weight in the Index of Industrial Production (IIP) and the slower growth in June could also weigh on industrial growth, which had unexpectedly slowed to 2.7% in May . The IIP data for June is due on August 12, after the Reserve Bank (RBI) reviews its monetary policy on August 4. With monsoons turning out better than forecast, there is pressure on the central bank to cut benchmark rates to revive demand. The June growth was partly depressed because of a strong base effect of high 8.7% growth in June 2014. In the first three months of the fiscal, core sector output rose 2.4% YoY compared with 6% gain in the corresponding period last year.
The eight infrastructure industries included in the core sector are coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity.Crude oil and natural gas production declined 0.7% and 5.9%, respectively, in June.
No comments:
Post a Comment