India’s annual electricity demand in 2019 grew at its slowest pace in six years with December marking a fifth straight month of decline, government data showed, amid a broader economic slowdown that led to a drop in sales of everything from cars to cookies and factories cutting jobs.
Electricity demand fell for the fifth straight month, data from the Central Electricity Authority showed. However, monthly demand picked up in the western states of Maharashtra and Gujarat, two of India’s most industrialized provinces.
Power demand fell 0.5% in December from the year-earlier period, representing the fifth straight month of decline, but it was better than the 4.3% fall in November.
Industries account for more than two-fifths of annual electricity consumption. Residences account for nearly a fourth and agriculture over a sixth.
Electricity demand is seen as an important indicator of industrial output and a sustained decline could mean a further slowdown.
India’s demand grew at 1.1% in 2019, the slowest pace of growth since the 1% uptick seen in 2013. The power demand growth slowdown in 2013 was preceded by three strong years of consumption growth of 8% or more.
Demand grew at 6.4% in 2018, the fastest pace since 2013. But 2019 saw a fall in consumption, reflected by slowing GDP growth and fall in accrual of indirect tax - levied on purchases of all products sold in the country.
Overall economic growth slowed to 4.5% in the July-September quarter, government data released in November showed, the weakest pace since 2013 as consumer demand and private investment fell.
In October, power demand fell 13.2% from a year earlier, its steepest monthly decline in more than 12 years, as a growth slowdown in Asia’s third-largest economy deepened.
The slower demand growth is a blow for many debt-laden power producers, who are facing financial stress and are owed over $11 billion by state-run distribution companies.