The historic shrink in the July-ended quarter, which was due to the 24% decline in GDP (Gross Domestic Product) compared to the year-ago, economists have predicted India’s economic contraction to be narrow in the September-ended quarter. However, the official figures will not be released till later on in the week.
The Mint, with the help of its high-frequency tracking, has predicted that the economic recovery could slow down. Out of the 16 high-frequency indicators of the Mint, 6 were green (above their 5-year-average trend), 8 were red (below their 5-year-average trend), and 2 were in line with it. This was the worst result they have seen on the scoreboard since July.
The micro tracker used by Mint, which was launched in October 2018, gives a monthly report on the state of the economy based on the trends in 16 high-frequency indicators. Out of the consumer economy segment, only one indicator was green as of October. The sale of passenger cars or wholesale dispatch during October was 11% more than the year before. The other indicators remain a disappointment.
There was a drop in the growth of tractor sales from above-trend levels to 8%, which is a level consistent with the trend. This can be chalked down as a sharp slowdown of the economy from high double-digit growth in tractor sales in June to September. The latest data shows that as of August, the subscriber base growth (16%) has remained below normal levels.
The Goods and Service Tax (GST) collection and the consumption of diesel are the high-frequency indicators that showed signs of improvement in October. However, the export of merchandise showed a sharp decline, which dropped below the level it was the year ago. This shows that there is still a lot of stress in the job market.Due to the unrelenting pressure of inflation, the ease of living segment still looks bleak. India was pulled down in the EM (Emerging Markets) ranks in October due to reasons such as the fall in exports and a rise in inflation.