Higher annual growth in air freight, rail transport and construction indicators for steel consumption and cement production confirmed the rebound. Tractor sales are the only indicator that is still negative. “Growth is expected to gain momentum for the rest of the year, mainly driven by the boost from festival spending,” the report said.
“The festival season is poised to see e-commerce sales volumes soar. Entry-level prices of electronics are about to fall, despite the focus on ‘premiumization’. Consumer sentiment is positive about online shopping, with wider choices and competitive prices and the convenience of easy returns and exchanges, improving the online shopping experience,” the report said.
The growth of e-commerce has resulted in pan-India demand for warehousing exceeding supply by an estimated 1.4 times, with an average growth of 10%.
“Rural consumers also seem ready to join the party with a revival in demand for FMCG after the September rains, despite a rise in freight and packaging costs. With kharif sowing area expanding than last year, rural unemployment fell in September,” the report said.
Meanwhile, inflation fell to 5% in September from 6.8% in August, reflecting a sharp correction in vegetable prices and a decline in inflation in other food groups. The report said that inflation is expected to improve in the near term due to a sustained decline in vegetable prices.
“The future trajectory will be determined by a number of factors, including reduced area under seed, a decline in reservoir levels, El Nino conditions and volatile global energy and food prices. According to RBI’s business surveys, manufacturing companies expect higher input cost pressure, but it will be marginal. lower sales price growth in the third quarter compared to the previous quarter,” the report said.