India's Core Infrastructure Growth Slumps

Growth of the six core infrastructure industries, which account for 26.7% of industrial output, accelerated by 4.3% in July, down from 7.2% in the same month a year earlier.

Growth of India's core infrastructure industries such as crude oil slumped in July, official data showed on Sept. 10, stoking concern about an already slowing economy.

Growth of the six core infrastructure industries, which account for 26.7% of industrial output, accelerated by 4.3% in July, down from 7.2% in the same month a year earlier, commerce ministry data showed.

The six sectors making up the core infrastructure index are crude oil, petroleum refinery products, coal, electricity, cement and finished steel.

Crude oil production shrank by 3% in July compared with growth of 0.9% in the same month a year earlier.

India's economy has been expanding by at least 9% for the past three financial years but is expected to slow to 7.7% in the year to March 2009, according to the government's Economic Advisory Council. Recent data showed first-quarter to June economic growth eased to 7.9%, the weakest pace in three-and-a-half years, as successive interest rate hikes to tackle double-digit inflation hit demand.

Hefty borrowing charges and a surge in prices -- inflation has nearly tripled in the past year to 12.34% -- have discouraged purchases of consumer and other goods, economists say.

Copyright Agence France-Presse, 2008

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