Economic indicators are threatened by increasing cases of the Omicron variant, impacting growth
The Indian economy grew steadily in November, a month when the Omicron variant of the Coronavirus sparked new concerns about risks to the recovery.
All eight high-frequency indicators tracked by Bloomberg News were stable last month, with the needle on a dial measuring so-called “Animal Spirits” remaining unchanged at 5. The level was reached by using the quarterly weighted average values to measure the volatility in the one-month scores.
But the pace of activity — based on indicators from service demand to factory output — is threatened by increasing cases of the ommicron variant, first discovered in South Africa late last month. While the Reserve Bank of India this month kept its full-year growth forecast stable at 9.5 percent, Governor Shaktikanta Das sounded cautious, saying “it is too premature to assess the effects of the new species at this stage”.
There are no restrictions on the economy yet, but the capital New Delhi canceled all Christmas and New Year’s festivities and joined a number of other states in re-imposing curfews as business ramped up. The federal government separately announced that it would extend the vaccination campaign to most teenagers and give booster shots to vulnerable areas.
Below you will find details of the dashboard. (For an alternative gauge of growth trends, follow Bloomberg Economics’ monthly GDP tracker – a weighted index of 11 indicators.)
Business activity
Activity in India’s dominant services sector grew for the fourth straight month, while the manufacturing purchasing managers index climbed to 57.6 – the best performance since January, according to IHS Markit. That helped push the composite index to its highest level in about a decade, with new orders also hitting their all-time high since February 2012.
export
Exports grew 27 percent year-on-year in November, slower than the pace of 43 percent in the previous month. Imports rose 57 percent, reflecting strong demand for gold, iron and steel, machinery and electronic goods as economic activity picks up again.
consumer activity
Passenger car sales fell for the third straight month as the global chip shortage hit production. That hiccup aside, RBI data showed that demand for bank credit grew 7 percent in November from a year earlier, reflecting momentum in consumption trends. Liquidity conditions were still in surplus last month, implying easy availability of credit.
Industrial activity
Industrial production grew 3.2 percent in October from a year earlier, a slower pace than during the first five months of the fiscal year as the favorable base effect fades.
Production from the infrastructure sector, which makes up 40 percent of the industrial production index, grew 7.5 percent in October. Both data are published with a delay of one month.
(This story was not edited by DailyExpertNews staff and was generated automatically from a syndicated feed.)
