Output from India’s eight core sectors grew 3.8% in December 2021, accelerating marginally from the 3.4% increase recorded in November, but still far from the healthy 8.4% year-on-year rise in October.
Although output declined year-on-year in just two sectors — crude oil (-1.8%) and steel (-1%) — economists said the signals from the data were mixed. Cement output recovered from a 3.6% contraction in November to grow almost 13%, while natural gas production rose 19.5%.
“Many high-frequency indicators from December have trailed the growth recorded in October so we expect industrial output to report a feeble rise of less than 2%, lower than core sectors’ growth for the fourth consecutive month,” said ICRA chief economist Aditi Nayar.
Care Ratings also expects core sectors’ growth to remain muted going forward. “The rapid surge in COVID-19 cases driven by the new Omicron variant and imposition of fresh curbs could further weigh on the core sector growth over the coming months,” the agency said in a note.
Separately, the Office of Economic Adviser in the Department for Promotion of Industry and Internal Trade revised the core sectors’ growth rate in September 2021 to 5.4% from 4.4% estimated earlier.