Indian Economy Slows as Core Sectors Growth Rate Dips to 5.4%
The growth rate of India's core industrial sectors slowed to 5.4% in July, a decrease from the previous month's 6%. This slowdown was expected, given other indicators showing easing demand conditions.
The Manufacturing Purchasing Managers' Index (PMI) dropped to its lowest level since August 2021 due to weak domestic demand conditions. The index of core industries (ICI) growth rate in July was the second-highest in the last seven months, but still raises concerns about the Indian economy.
Some sectors showed strong growth, such as coal at 7.6%, iron ore at 29.5%, and cement at 13.1%. However, these gains are partly due to low base effects, with July's numbers being compared to contractions in previous years.
The domestic crude oil and natural gas sectors have been a drag on the economy, contracting continuously for over a year. India's dependence on external imports is proving expensive, with high oil prices increasing the crude oil import bill by 41% in July.