InvestorQ : How do you see the surge in core sector growth to 5.8% in February 2022?
vaishnavi mhatre made post

How do you see the surge in core sector growth to 5.8% in February 2022?

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vidhya Laxmi answered.
1 month ago
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You are correct that the core sector yoy growth for Feb-22 came in at a healthy 5.8%. However, you must also remember that this was on a negative base. What I mean is that in Feb-21 the core sector growth was negative at -3.3%. On such a negative base, even a normalized growth does look quite impressive. Hence, to be fair, you need to adjust for the core sector numbers to get a clear picture of the actual growth.

The bigger concern from my standpoint in the core sector numbers was the loss of momentum on a MOM basis. Remember, core sector is nearly 40.27% of IIP so it is a lead indicator of the GDP growth. Due to higher crude prices and the Ukraine situation, the core sector growth contracted by 5.3% on a month-on-month basis. Among the eight sectors, it was oil refining, steel, natural gas and cement which gave a big push to core sector growth while crude extraction and fertilizes lagged behind.

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