Growth in key infrastructure sectors increased by 6.3% in May, compared to 6.7% in April

Official data released on Friday showed growth in eight key infrastructure sectors rose 6.3% in May on strong gains in coal, natural gas and electricity production, although the pace of growth was slower than in April.

Production in eight sectors rose 6.7 percent in April. Growth in these key sectors — coal, crude oil, natural gas, refined products, fertilizers, steel, cement and electricity — was 5.2 percent in May 2023.

Official data showed that production of fertilisers, petroleum and cement recorded negative growth in May. In the April-May period of the current fiscal year, production of these sectors grew by 6.5% compared with 4.9% in the same period of the previous fiscal year.

The dynamics of coal, natural gas and electricity production increased by 10.2%, 7.5%, respectively. and 12.8 percent compared to 7.2 percent, (-) 0.3 percent and 0.8 percent in May 2023.

The growth rate of production of refined products and steel slowed down in the analysed month to 0.5 per cent and 7.6 per cent.

The eight main sectors account for 40.27 percent of the country’s Industrial Production Index (IIP).

Commenting on the data, Icra Ltd. Chief Economist Aditi Nayar said that while core sector growth remained above 6 per cent for the fourth consecutive month, there was a slight decline in May.

She added that a combination of factors, including a heatwave in parts of the country and staggered parliamentary elections, may have restricted activity and implementation of measures in some sectors.

“At the same time, the heatwave has increased energy demand, which has resulted in higher growth of coal and electricity in May 2024 compared to the previous month. We expect IIP growth to be 4-5 percent in May 2024,” she added.