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

August 2024

Key highlights include:

1. In Jul'24, the economic environment exhibited a diverse pattern of sectoral performance vs. the previous month, with sectors such as industry and trade experiencing a slowdown, while logistics and BFSI sectors grew. IIP inched down in Jun'24, driven by a slower pace of growth in manufacturing output and electricity generation. Cement production recorded an uptick, while steel and power consumption declined. The auto sector recorded mixed trends, with a seasonal decline in PV, 2W, and tractor sales, while 3W and EV registrations registered growth.
2. On the trade front, the merchandise trade deficit widened to a 9-month high in Jul'24 driven by weak global demand and volatile global crude oil prices, impacting petroleum exports. Services trade surplus improved, supported by IT and BPO services exports. Forex reserves continued to grow, reaching a new high in Jul'24, primarily due to an increase in foreign currency assets, while FDI plummeted in Jun'24 vs. May'24.
3. Most BFSI indicators were on an upward trajectory in Jun-Jul'24. UPI volume and value reached an all time-high in Jul'24, with transaction value surpassing INR 20Tn mark for the third consecutive month. NSE and BSE transactions recorded a strong growth of 103% YoY, driven by a significant rise in the number of retail investors. Life insurance premium decelerated, due to a seasonal decline in LIC new business premium.
4. In terms of macroeconomic indicators, CPI inflation fell to a 5-year low of 3.54%, driven by lower food inflation and sustained deflation in fuel prices. WPI inflation eased to a 3-month low at 2.06% due to low food prices and primary articles. Manufacturing PMI declined slightly in Jul'24 due slower manufacturing activity. Services PMI also saw a marginal decline amid rising input costs. GST collections hit a 3-month high in Jul'24, posting a 10% YoY growth due to significant increase in domestic transactions and imports. Analysts forecast GDP growth of 6.8%-7.2% YoY for FY25, with most agencies retaining or raising their projections.

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