India's June infrastructure output rises at slowest pace in nearly two years

NEW DELHI (Reuters) -India's infrastructure output in June rose 4% year-on-year, its slowest pace in nearly two years, government data showed on Wednesday, with monsoons moderating electricity demand.

Infrastructure output, which accounts for 40% of India's industrial production, measures activity in eight sectors, including refinery products and electricity. It last grew at a slower pace of 0.7% in October 2022.

Infrastructure output growth in May was revised higher to 6.4%.

Coal production grew 14.8% in June, while electricity generation rose 7.7%, compared to a 10.2% and 13.7% growth in May, respectively.

Steel production grew 2.7%, against a 6.8% increase a month earlier. Natural gas output rose 3.3%, compared to a 7.5% jump in the previous month.

Infrastructure output expansion slid to a 20-month low due to a mix of moderation in growth and deeper contraction in five of the eight constituents, said Aditi Nayar, economist at ICRA

Cement production rose 1.9%, compared with May's 0.6% drop, and fertiliser production increased 2.4% in June, compared with a fall of 1.7% in May.

However, output of refinery products declined 1.5% against a 0.5% rise in May, while crude oil production fell 2.6%, compared with a 1.1% drop in May.

With the dip in infrastructure output, India's index for industrial production (IIP) in June may grow by 3.5%-5%, Nayar added. India's government will release IIP for June on Aug. 12.

(Reporting by Shivangi Acharya and Nikunj Ohri; Editing by Varun H K)