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India Economic Monitor

BCG’s India Economic Monitor shares insights on the state of Indian Economy from the most recent month, capturing 30+ key macroeconomic indicators and comparing them with trends observed in recent months. These indicators include industrial activity, trade, financial services, economic sentiments and sector-wise trends.

Brief Summary for Latest Report

February, 2024

Key highlights include:

  1. In Jan'24, most high-frequency indicators exhibited moderate to high growth vs. previous month. IIP witnessed an upswing in Dec'23, led by growth in manufacturing sector output. Underlying metrics (cement production, steel consumption & daily avg. power consumption) recorded a monthly uptick. Auto sector also witnessed a strong growth in most segments (except three-wheeler) driven by positive consumer sentiment and continued recovery in rural markets. 
  2. Trade and investment indicators exhibited mixed trends. Merchandise trade deficit narrowed in Jan'24, largely due to a steeper drop in imports over exports. Imports in categories such as fertilizers and vegetable oil dropped due to reduced demand and push for domestic production. The decline in exports is mainly due to armed conflict in the Red Sea. Services trade surplus grew in Jan'24 due to high growth in IT and BPO services export. Forex reserves declined in Jan'24, after hitting a 21-month high in Dec'23. FDI also plummeted sharply, mainly due to a rise in repatriation of equity capital.
  3. Most BFSI indicators exhibited an increasing trend in Dec' 23-Jan '24. UPI volume and value recorded a new high in Jan'24 with transaction value touching INR 18.41 trillion. This can be attributed to the increasing number of UPI users and payment touchpoints. Life insurance premium fell in Jan'24 after registering a surge in Dec'23, due to significant fall in LIC new business premium. NSE and BSE transactions grew significantly, registering a 20% MoM growth in Jan'24.
  4. On the macroeconomic front, CPI inflation cooled to a three-month low of 5.09% in Jan'24 due to slow growth in food prices and favorable base effects. WPI inflation also eased in Jan'24 to 0.27%, on account of lower inflation rates in primary articles and manufactured products. Manufacturing PMI hit a four-month peak in Jan'24, driven by robust growth in new domestic and exportorders. Services PMI also surged to a six-month high, attributable to faster growth in new orders, formal employment in the sector, and business confidence. GST revenue clocked its second highest monthly collection ever, up by 10.4% YoY, due to better tradecompliance, settled notices for 2017-18, and anti-evasion data analytics. Analyst forecasts indicate GDP growth of 6.2-7.3% YoY for FY24, with most agencies raising their projections.  

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