Quote on Core by Rahul Agrawal, Principal Economist, ICRA Ltd
Below the Quote on Core by Rahul Agrawal, Principal Economist, ICRA Ltd
"The year-on-year (YoY) growth in core output eased marginally to 4.8% in August 2026 from the downward revised 5.0% in July 2026, partly on account of an unfavourable base. The deceleration was broad based, with six of the nine sectors reporting a deterioration in their performance between these months.
Among the mining-related segments, coal and iron ore saw a material deterioration in their performance in August 2026 relative to July 2026, largely owing to an adverse base; these two together pulled down the headline core output growth by as much as 130 bps between these months.
Fertiliser output contracted for the sixth consecutive month in August 2026, following the onset of the West Asia crisis, with the pace of the same widening to double digits in the month. Among the construction-related sectors, while steel output growth inched up slightly in August 2026, it remained lacklustre at just 3.4%. However, cement output expanded by double digits for the second straight month in August 2026.
Besides, electricity generation surged by 11.6% in August 2026, amid healthy growth in demand, supporting the overall growth in core output in the month. Excluding this, core output rose by just ~1.6% in the month (vs. +3.4% in July 2026).
Given these trends, we expect the IIP growth to ease to ~5.0-6.0% in August 2026 from 6.7% in July 2026."
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