The core sector number for the month of October 2016 was announced by the Department of Economic Affairs on 30th November. The core sector consists of 8 key sectors that form the backbone of the economy and include; Steel, Cement Fertilizers, Crude Oil, Natural Gas, Refinery output, Electricity and Coal. The reason the core sector is important is that it constitutes 38% of the index of industrial production (IIP) and therefore tends to lead the IIP with a time lag. More importantly, the core sector number has strong externalities. The increase in production of sectors like steel, electricity and coal has a multiplier effect on the economy. Changes in any of these variables have a proportionately higher impact on the GDP… Continue reading
