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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

April, 2024

Key highlights include:

  • In Mar'24 select high frequency indicators exhibited moderate to high growth vs. the previous month. IIP moderated in Feb'24 after witnessing a peak in Jan'24, due to a marginal decline in all its three components viz. electricity, mining and manufacturing. Cement production also saw a decline while steel and power consumption increased vs. previous month's levels. Auto sector sales witnessed modest growth in most segments (except 2W) attributable to improved supply and financial incentives.
  • Trade and investment indicators showcased mixed trends. In Mar'24, the merchandise trade deficit narrowed to an 11-month low due to a steep decline in imports, notably gold, which fell by over 50% from last year. The services trade surplus narrowed, driven by a fall in services exports. Forex reserves continued to improve in Mar'24 partly due to a rise in foreign currency assets. FDI witnessed a decline in Feb'24, mainly due to a rise in repatriation of equity capital.
  • Most BFSI indicators were on an upward trajectory in Feb-Mar'24. UPI transaction values and volumes witnessed a remarkable surge, with transaction value exceeding an all-time high of INR 19.8 trillion. NSE and BSE transactions recorded a monthly decline of 24%, primarily due to reduced daily trading volumes in the cash segments and increased volatility in the equity market. Life insurance premium recorded a cyclical surge in Mar'24, driven by an acceleration in new business premium collected by LIC.
  • Most macroeconomic indicators showed signs of improvement in Mar'24. CPI inflation decreased to a nine-month low at 4.9%, due to deflation in fuel prices and continued easing in core inflation. WPI inflation increased to a three-month high of 0.53% in Mar'24, mainly driven by primary articles. Manufacturing PMI achieved a 16-year peak of 59.1 in Mar'24, propelled by robust growth in new export orders, upturn in input inventories and higher job creation. Services PMI also surged in Mar'24 attributed to healthy demand conditions, efficiency gains and positive sales developments. GST collections reached their second-highest level ever due to a significant rise in collection from domestic transactions.
  • RBI's consumer confidence survey surged to its highest level since mid-2019 indicating increased optimism about the current economic situation and future expectations. Analyst forecasts indicate GDP growth of 6.5%-7.2% YoY for FY25, with most agencies raising their projections.

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