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Core sectors' growth falls to 19-month low of 1.8% in January on poor performance by crude oil, refinery products and electricity

New Delhi: Eight core industries grew at the slowest pace in 19 months in January as the production of crude oil, refinery products and electricity contracted, official data showed on Thursday.

The infrastructure sectors expanded by 1.8 percent in January 2019, the lowest growth rate since June 2017 when the core sector grew by 1 percent.

 Core sectors growth falls to 19-month low of 1.8% in January on poor performance by crude oil, refinery products and electricity

Representational image. Reuters.

The core sector had expanded at 6.2 percent in January 2018. In December 2018, the growth was at 2.7 percent on account of negative growth in crude oil, refinery products and fertilisers sectors.

Production of crude oil, refinery products and electricity contracted by 4.3 percent, 2.6 percent and 0.4 percent, respectively, in January 2019.

India Ratings and Research said the electricity growth number of (-) 0.4 percent is the lowest since February 2013.

The growth rate of coal and cement sectors slowed to 1.7 percent and 11 percent in January as against 3.8 percent and 19.6 percent, respectively, in the year-ago month.

However, natural gas, fertilisers and steel output grew by 6.2 percent, 10.5 percent and 8.2 percent, respectively, in the month under review.

"Declining trend in core sector growth from October 2018 suggests continued weakness in industrial activities and a weak second half economic growth. Expect a low industrial growth in the month of January 2019," Devendra Kumar Pant, Chief Economist, India Ratings and Research said.

Sluggish infrastructure sector growth would impact the Index of Industrial Production (IIP) as these segments account for about 41 percent of the total factory output.

According to the Commerce and Industry Ministry data, during April-January 2018-19, the eight sectors recorded a growth rate of 4.5 percent against 4.1 percent in the same period of the previous fiscal.

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Updated Date: Feb 28, 2019 20:05:09 IST