India's economy appeared to be slowing rather than accelerating last month, as high-frequency indicators tracked by Bloomberg pointed to deteriorating business and consumption activity.
India's economy appeared to be slowing rather than accelerating last month, as high-frequency indicators tracked by Bloomberg pointed to deteriorating business and consumption activity.
Although a dial measuring so-called Animal Spirits showed activity was steady for the fifth straight month in November, the needle was just one bad data point from swinging to the left. Exports, a key growth lever in the past year, were among three of the eight metrics that performed poorly. the rest were unchanged.
Bloomberg's dashboard shows a broadly grim outlook for 2023 as tighter global interest rates weigh on demand. The gauge uses a weighted average of three months to smooth out volatility in one month's readings.
Below are more details:
Business Activity
The Purchasing Managers' Survey for November showed activity in the services and manufacturing sectors improved, although the three-month weighted average was still weak. New orders rose sharply in both sectors, while output prices rose at their fastest pace in three months.
Pollyanna de Lima, associate director of economics at S&P Global Market Intelligence, said the latest results are good news, even if the inflation trend is somewhat worrying. "Evidence of stable inflation may warrant a further increase in the policy rate at a time when global economic challenges may negatively impact India's growth," he said.
export
Data released by the trade ministry showed exports grew by barely 0.6% last month after a decline of 16.7% in October. Only half of the 30 sectors registered growth. The government attributed the weak performance to weak demand for engineering and iron ore products.
Imports climbed 5.4 per cent, keeping India's trade gap above $20 billion for the eighth consecutive month. That puts pressure on the country's current account deficit, a key vulnerability for the economy and the rupee, the worst-hit major Asian currency this year after the Japanese yen.
consumer activity
Data from the Reserve Bank of India showed that bank credit demand remained healthy at 17.2 per cent, despite tighter liquidity conditions and higher borrowing costs. Goods and services tax collections, which help measure consumption in the economy, rose 11 per cent, a modest performance compared to October's 24 per cent jump.
market sentiment
Electricity consumption, a widely used proxy to measure demand in the industrial and manufacturing sectors, was weak, with peak requirement rising to 162 gigawatts from 155 gigawatts in October last month. India's unemployment rate climbed to 8 percent, according to data from the Center for Monitoring Indian Economy Pvt.
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