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Economy Watch
Economy Watch provides an in-depth review of salient developments in India’s macroeconomy and economic policy in a global context.
It has established itself as a thought leadership publication, providing valuable inputs for policymakers in the central and state governments, academicians, industry and businesses and other stakeholders.
Economy Watch was launched for public distribution soon after demonetization. Since then more than 90 issues have been published.
It covers various macro-fiscal dimensions of the Indian economy including growth, inflation, government finances, external trade, monetary and financial sectors. It places India in a comparative economic framework using selected developed and developing countries.
Two innovative indices have been developed to capture changes in aggregate demand and macroeconomic imbalances in the Indian economy. The analysis in the Economy Watch is based on monthly, quarterly and annual data sourced from national and international sources.
Every month, a focused theme of contemporary economic importance is identified for a deep and insightful analysis which provides useful inputs and recommendations.
Key highlights for September 2024
- Real GDP growth eased to a five-quarter low of 6.7% in 1QFY25 from 7.8% in 4QFY24 while GVA growth improved to 6.8% from 6.3% over the same period.
- In August 2024, while services PMI showed a strong expansion, manufacturing PMI indicated an easing growth momentum. Their respective levels were at 57.5 and 60.9.
- Led by improvement in the growth of manufacturing sector output, overall IIP grew by 4.8% in July 2024.
- CPI inflation remained low at 3.7% in August 2024, marginally higher than 3.6% in July 2024, whereas core CPI inflation at 3.3% was close to its level of 3.4% in July 2024.
- WPI inflation eased to a four-month low of 1.3% in August 2024, led by lower inflation in fuel and commodities.
- As per the CGA, GoI’s gross tax revenues (GTR) showed a growth of 21.3% during April-July FY25 with growth in direct taxes at 33.6% and that in indirect taxes at 7.1%.
- GoI’s total expenditure showed a contraction of (-)5.8% during April-July FY25, with both revenue and capital expenditures contracting by (-)2.3% and (-)17.6% respectively.
- GoI’s fiscal and revenue deficits during April-July FY25 stood at their historic low levels of 17.2% and 3.8% of their respective annual BE.
- Growth in gross bank credit improved to 15.1% in July 2024 from 13.9% in June 2024.
- Merchandise exports contracted for the second successive month by (-)9.3% and growth in imports eased to a four-month low of 3.3% in August 2024, partly reflecting lower crude and commodity prices.
- Merchandise trade deficit increased to a 10-month high of US$29.6 billion in August 2024.
- Net FDIs witnessed outflows for the second successive month at US$1.4 billion in July 2024 while net FPI inflows were strong at US$5.1 billion during the month.
- Average global crude price fell to a seven-month low of US$78.1/bbl. in August 2024 from US$83.3/bbl. in July 2024.
- The ADB (July 2024) has projected India’s growth at 7.0% in 2024 (FY25) driven by strong growth in manufacturing and construction sectors and supported by improving rural and investment demand.
- RBI’s Monetary Policy Committee may consider reducing the repo rate in its forthcoming meeting in October 2024.
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