Jul sees slowest pace of India's economic activity growth in 18 months

20 Aug '23

1 min read

Pic: Vinayak Jagtap / Shutterstock

Insights

Care Ratings' CareEdge economic meter, the index of India's economic activity, grew at a muted pace of 1 per cent in July this year compared with 5.7 per cent growth in June—the slowest pace of expansion in 18 months.
The country's merchandise exports contracted for the sixth consecutive month in July (16 per cent) amid ongoing economic uncertainty.

Care Ratings’ CareEdge economic meter (CEM), the index of India’s economic activity, grew at a muted pace of 1 per cent in July this year compared with 5.7 per cent growth in June. Even sequentially, the index fell sharply to 108.9 in July from 117.9 a month ago. It was the slowest pace of expansion in 18 months.

This deceleration in growth was due to disappointing export and import numbers, mixed performance of rural demand indicators and significant growth moderation in corporate bond issuances, Care Ratings said in a release.

On the positive side, many high-frequency indicators like E-way bill issuances and power consumption performed well.

Merchandise exports contracted for the sixth consecutive month in July (16 per cent) amid ongoing economic uncertainty. The fall was sharper for petroleum products (43.7 per cent) contributed by year-on-year lower crude oil prices.

However, non-petroleum exports also contracted by 8 per cent.

Merchandise imports contracted by 17 per cent. Indicators of rural demand performed poorly in July.

Unemployment rate improved in July to 7.95 per cent from 8.45 per cent a month ago due to higher demand for agricultural labour. However, it was still much higher than a year ago—6.83 per cent in July 2022.

Fibre2Fashion News Desk (DS)

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