Core sector growth slows to 4% in December 2024, still in expansion mode for a fourth consecutive month

Core sector performance for December

The Index of Eight Core Industries, which measures the health of the core sector, rose by 4% in December 2024 as compared to a 4.4% growth in November, data released by Commerce Ministry on January 31 showed.

Despite the month-on-month drop, December 2024 marked the fourth consecutive month of expansion for the Index of Eight Core Industries data. The index represents India’s infrastructure output and has a 40% weight in the Index of Industrial Production (IIP).

India’s industrial production had accelerated to a six-month high of 5.2% in November on the back of 4.4% rise in core sector growth.

The slower pace of growth in core industries doesn't bode well for the economy, which recently witnessed a slowdown to a seven-quarter low GDP of 5.4%, prompting the RBI and other economists to lower their full-year GDP for the economy.

The full-year growth estimate released earlier this month has pegged the economic growth to slow down to a four-year low of 6.4%,  but expects some pick up in momentum during the second half of FY25. According to Reserve Bank's estimate, the Indian economy is expected to expand by 6.6% in FY25, compared with the 7.2% projected earlier.