InvestorQ : Why did the core sector growth again fall in the month of January 2021?
Debbie Mascarenhas made post

Why did the core sector growth again fall in the month of January 2021?

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Arti Chavan answered.
2 months ago
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The infrastructure segment consisting of the 8 core sectors for the month of December 2020 came in the negative territory, contracting by -1.3%. However, the good news came via a series of growth upgrades for previous month data. The core sector contraction for Nov-20 was modified from -2.6% to -1.4% while for Sep-20 it was upgraded from -0.1% to 0.6%.

SO it is not like 10 months of negative core sector growth any longer. What we have is effectively 6 months of negative core sector growth between April 2020 and August 2020 followed by positive growth in the month of September 2020. However, subsequently, core sector reverted to negative core sector growth between Oct-20 and Dec-20 all over again.

The cumulative core sector number for 9-months extending from April 2020 to December 2020 stands at -10.1% and it has improved slightly over the last month. However, core sector certainly looks set to eventually converge with the GDP contraction of -7.7% for FY21. Fertilizers were a disappointment with negative growth while only coal and electricity were in positive.

Cement dipper deeper in the red while steel failed to hold the momentum of previous months. The good news came from the oil-linked core sector basket accounting for 45% of the overall composition. The oil sector showed signs of bottoming out as oil prices in the Brent crude market reverted to $56/bbl giving heft to core sector growth expectations.

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