Growth in eight major infrastructure sectors slowed to 4.3 percent in May 2023 due to a decline in crude oil, natural gas and electricity production.
The growth of the core sector was 19.3 percent in May 2022, while the main infrastructure sectors recorded a growth of 4.3 percent in April 2023.
In the period April-May of this financial year, the output growth of these eight sectors slowed to 4.3 percent, compared to 14.3 percent in the same period a year ago.
Aditi Nayar, chief economist and head (research & outreach) at ICRA, said: “Growth of the eight core industries remained broadly stable at 4.3 percent year-on-year in May 2023, amid healthy growth in cement, fertilizer production , steel and coal, even as electricity generation, crude oil and natural gas production contracted in the month, negatively impacting the overall index.”
She added that cement production grew by double digits for the second consecutive month, while steel production rose 9.2 percent year-on-year in May 2023, indicating a robust performance by the construction sector.
“Electricity generation contracted in May 2023 for a third consecutive month with weak demand, due in part to relatively cooler temperatures due to the unusual rainfall in the pre-monsoon period,” Nayar said.
She also said that while annual growth in core output remained stable, the performance of most available high-frequency indicators improved in May 2023 compared to April 2023. Consequently, ICRA expects annualized IIP growth to reach 4-6 percent in May 2023.
(With input from PTI)