India's core sector growth rebounds to 5.4% in November

India's core sector, which includes industries such as coal, fertilizers, steel, cement, and electricity, saw a rebound in growth to 5.4% in November, up from a 20-month low of 0.9% in October. This is expected to lead to an expansion in overall industrial output for November, following a 4% contraction in the previous month. The industrial sector is facing challenges from a slowing export market due to a global economic downturn and local issues such as rising interest rates and high inflation. According to India Ratings, the steel and cement sectors are expected to see good year-on-year growth in the near term due to sustained investment support from the government. The output of the core sector is expected to rise by around 5% in December. However, refinery products saw a 9.3% year-on-year contraction to a 21-month low, while crude oil and natural gas output declined by 1.1% and 0.7%, respectively. Aditi Nayar, Chief Economist at ICRA, attributed the improvement in core sector growth to the reversal of the base effect, as there were fewer holidays in November 2022 compared to the same month in 2021.