Before Omicron, India’s Economy Grew Steadily, Show 8 Indicators
India’s economy was expanding at a steady pace in November, a month when the Omicron version of the coronavirus prompted new concerns about the risks of a recovery.
All eight high-frequency indicators tracked by Bloomberg News were stable last month, keeping the needle on the dial measuring so-called ‘animal spirits’ unchanged at 5. Level smoothing was obtained using three-month weighted average readings. One month’s score fluctuates.
But the pace of activity – based on indicators ranging from demand for services to factory output – faces threats from rising cases of the Omicron variant, first detected late last month in South Africa. While the Reserve Bank of India kept its full-year growth forecast steady at 9.5 per cent this month, Governor Shaktikanta Das cautioned, saying “it is too early to estimate the effects of the new stress at this stage”.
There are no economy-crippling restrictions in place yet, but the capital New Delhi canceled all Christmas and New Year’s festivities and joined some other states in reimposing night curfews as cases ticked up. The federal government separately announced a broadening of the vaccination campaign to include the majority of adolescents and to provide booster shots to vulnerable groups.
Below are the details of the dashboard. (For an alternative gauge of growth trends, follow Bloomberg Economics’ Monthly GDP Tracker – A Weighted Index of 11 Indicators.)
Activity in India’s key services sector rose for the fourth straight month, according to IHS Markit, while the Manufacturing Purchasing Managers’ Index climbed 57.6 – the best performance since January. This helped lift the composite index to its highest level in nearly a decade, with new orders reaching their top readings since February 2012.
Exports grew 27 per cent year-on-year in November, slower than the 43 per cent pace seen in the previous month. Imports rose 57 percent, reflecting increased demand for gold, iron and steel, machinery and electronic goods as economic activity improved.
Passenger car sales fell for the third straight month as production was hit by global chip shortages. Further, RBI data shows that demand for bank credit grew by 7 per cent in November from a year ago, reflecting a pick-up in consumption trends. The liquidity position still showed surplus last month, implying easier credit availability.
Industrial output grew 3.2 per cent in October from a year ago, a slower pace than the first five months of the fiscal year as the favorable base effect waned.
Production in infrastructure industries, which account for 40 per cent of the Index of Industrial Production, grew 7.5 per cent in October. Both data are published with an interval of one month.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)