A cross-section of high-frequency indicators compiled by Bloomberg News showed a moderation in demand for goods and services. The needle on the dial that measures so-called animal spirits, however, held steady at 5 last month as the gauge uses a three-month weighted average to smooth out volatility in one-month readings.
The Reserve Bank of India, which has hiked interest rates by a total of 140 basis points in three moves this year, has indicated that future tightening will be calibrated to ensure that the economy does not suffer a severe slowdown, and that prices will continue to rise. Reduces pressure. Its recent peak.
A pulse-check of the economy is due next week, with GDP data for the April-June quarter likely to show double-digit growth, reflecting demand for a wider reopening from the pandemic.
Below are the details:
Surveys of purchasing managers show that India’s services activity in July fell to its lowest level in four months on weak sales growth and elevated inflation.
While domestic demand for Indian services remained stagnant, international demand deteriorated, offset by gains in the manufacturing sector that rose to the highest level in eight months.
A softening business outlook in services eased the S&P Global India Composite PMI Index to 56.6 in July from 58.2 a month ago.
The trade deficit widened to a new record of nearly $30 billion, as export growth hit a 17-month low on weak global demand and levies on outbound shipments of fuel, which account for more than 15% of India’s exports.
Imports remained near record-highs on a weak rupee, which was one of the worst-performing Asian currencies in the past three months.
Crude, which comprises about one-third of India’s imports, and coal accounts for 8%, mainly contributed to the increase in inbound shipments.
Passenger vehicle sales grew for the second consecutive month, helped by a broad-based recovery across segments, including two-wheelers. While supply issues are looming due to semiconductor shortages, automakers cautioned that costly loans could dampen demand for new vehicles.
Bank credit continued to grow despite higher interest rates, rising to the highest in three years at 14.5% at the end of July. Liquidity in the banking system remained in surplus.
Amid signs of industrial activity, factory output as well as the core sector indicated moderation in June as power consumption and coal production slowed down with the onset of monsoon.
The year-on-year growth in the Index of Industrial Production declined to 12.3% in May from a one-year high.
Growth of eight core infrastructure industries also declined to 12.8 from 19.3% in the previous month. Both data are published with an interval of one month.