The growth of eight key infrastructure sectors slowed down to 4.3 per cent in May 2023 due to a decline in the production of crude oil, natural gas, and electricity.
The core sector growth was 19.3 per cent in May 2022 while in April 2023 the key infra sectors recorded a growth rate of 4.3 per cent.
During April-May this fiscal, the output growth of these eight sectors slowed down to 4.3 per cent as against 14.3 per cent in the year-ago period.
Aditi Nayar, chief economist and head (research & outreach) at ICRA, said, “The eight core industries growth remained broadly stable at 4.3 per cent YoY in May 2023, amid a healthy growth in cement, fertiliser, steel and coal output, even as the electricity generation, crude oil and natural gas production contracted in the month, exerting a drag on the aggregate index.”
She added that cement output expanded by double digits for the second consecutive month, while steel production rose by 9.2 per cent YoY in May 2023, pointing to a robust performance of the construction sector.
“Electricity generation contracted for the third consecutive month in May 2023 with subdued demand partly on account of relatively cooler temperatures owing to the unseasonal rainfall seen in the pre-monsoon period,” Nayar said.
She also said Although the YoY growth in core output remained steady, the performance of a majority of the available high-frequency indicators improved in May 2023 relative to April 2023. Consequently, ICRA expects the YoY IIP growth to print at 4-6 per cent in May 2023.
(With Inputs from PTI)
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