Core sectors rebound to hit 6-mth high growth of 2.9%
The Economic Times, April 30, 2009, Page 7
The economy is firmly on the recovery track. Infrastructure growth, which was lagging for the past six months, has bounced back. ICRA has forecast a 7.5% growth for FY10 while Mastercard sees a revival in H2
Our Bureau NEW DELHI
CORE sector growth is back on track. The index for six core industries—crude oil, petroleum refinery products, coal, electricity, cement and finished carbon steel—has turned in a growth of 2.9% in March 2009 over March last year. This has been the highest growth rate in the last six months, and higher than the average of 2.7% for 2008-09 as a whole.
Economists pointed out that a recovery might be round the corner. “These are some positive signals. Benign cues from the global economy might add to the speed of recovery. But I will wait for another couple of months before taking a call on the strength of the recovery,” said DK Joshi, principal economist at ratings agency CRISIL.
The biggest surprise in the basket of core sectors was electricity generation, which touched a 13-month high. ”The availability of coal has improved and the units that were commissioned last year are working well, resulting in higher generation of power,” said Central Electricity Authority chairman Rakesh Nath. G
iving further strength to Cabinet secretary KM Chandrashekar’s assessment that the economy is beginning to respond to the booster shots administered by the government, cement production surged 10.1% in March. JK Cement group executive president RG Bagla said, “Increased government spending on infrastructure led to higher demand for cement in March.”
Coal production grew 5.2% in the year and showed a cumulative growth of 8.1% for the fiscal. Annual growth in finished carbon steel production contracted 2.6% in March, raising concerns. But this is expected to pick up in the coming months. According to Naveen Vohra, partner at Ernst & Young, steel consumption and production is expected to pick up. ”Demand in the auto sector has also started looking up on the back of a marginal improvement in the credit situation,” he added. The steel industry staged a smart recovery in the first three months of 2009 on account of a revival in the auto, rural infrastructure and housing sectors, and is expected to gather further momentum hereon.
Petroleum refinery products recovered to grow 3.3%— the highest in last 5 months—while the drop in crude oil production recovered from a low of 8.1% in January to 2.3% in March.
The Economic Times, April 30, 2009, Page 7
The economy is firmly on the recovery track. Infrastructure growth, which was lagging for the past six months, has bounced back. ICRA has forecast a 7.5% growth for FY10 while Mastercard sees a revival in H2
Our Bureau NEW DELHI
CORE sector growth is back on track. The index for six core industries—crude oil, petroleum refinery products, coal, electricity, cement and finished carbon steel—has turned in a growth of 2.9% in March 2009 over March last year. This has been the highest growth rate in the last six months, and higher than the average of 2.7% for 2008-09 as a whole.
Economists pointed out that a recovery might be round the corner. “These are some positive signals. Benign cues from the global economy might add to the speed of recovery. But I will wait for another couple of months before taking a call on the strength of the recovery,” said DK Joshi, principal economist at ratings agency CRISIL.
The biggest surprise in the basket of core sectors was electricity generation, which touched a 13-month high. ”The availability of coal has improved and the units that were commissioned last year are working well, resulting in higher generation of power,” said Central Electricity Authority chairman Rakesh Nath. G
iving further strength to Cabinet secretary KM Chandrashekar’s assessment that the economy is beginning to respond to the booster shots administered by the government, cement production surged 10.1% in March. JK Cement group executive president RG Bagla said, “Increased government spending on infrastructure led to higher demand for cement in March.”Coal production grew 5.2% in the year and showed a cumulative growth of 8.1% for the fiscal. Annual growth in finished carbon steel production contracted 2.6% in March, raising concerns. But this is expected to pick up in the coming months. According to Naveen Vohra, partner at Ernst & Young, steel consumption and production is expected to pick up. ”Demand in the auto sector has also started looking up on the back of a marginal improvement in the credit situation,” he added. The steel industry staged a smart recovery in the first three months of 2009 on account of a revival in the auto, rural infrastructure and housing sectors, and is expected to gather further momentum hereon.
Petroleum refinery products recovered to grow 3.3%— the highest in last 5 months—while the drop in crude oil production recovered from a low of 8.1% in January to 2.3% in March.
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