Is India’s economic recovery picking up steam? Here’s all you need to know


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India’s economy has recovered quickly from the second wave of the Covid-19 pandemic and data suggests growth will be faster in the coming quarters, particularly during the holiday season.

The improvement in the Covid-19 situation and the acceleration of the vaccination rate have allowed economic activity to return to normal, leading to a rapid recovery in the service sector and manufacturing activity.

Of the eight high-frequency economic indicators, two gained momentum in the past month, Bloomberg News reported. He said five of the indicators remained stable and one slowed down.

Explained: Is Indian Economy Gaining Covid-19 Immunity?

IMPROVEMENT OF COMMERCIAL ACTIVITY

The improvement in activity is one of the main indicators of a positive growth dynamic. In August, factory activity in the country saw growth in new orders and the outlook remains positive.

Meanwhile, service activity also suggested there had been growth in August with increased attendance. As a result, the combined manufacturing and services index entered expansionary territory for the first time in four months.

INCREASING EXPORTS

Another positive economic indicator is the increase in exports. Exports grew at a steady pace of about 46 percent year-on-year in August.

Although the high percentage of growth is due to the contraction of the previous year, it is still one of the few countries where export activity has resumed.

Read also | Main parameters of the economy on the rise, increase in import-export

The country’s exports in August 2021 stood at $ 33.14 billion, an increase of 45.17% year-on-year. Last year, August’s exports amounted to $ 22.83 billion.

REBOUND IN CONSUMER ACTIVITY

Consumer activity has also improved considerably in recent months, a positive indicator for businesses as the holiday season approaches.

While some sectors are under pressure from high freight costs and shortage of raw materials, a majority of companies expect sales to increase in the next quarter.

The increase in bank credit last month also indicates that more people are willing to spend more in the coming quarters. Bank credit rose 6.7% in August from a year earlier and 0.2% above the level seen in mid-July, according to data from the Reserve Bank of India (RBI).

While these key indicators suggest that the country’s economy is recovering rapidly, several challenges remain, including high levels of unemployment, fear of a possible third wave, and income inequality.

Explained: Why India’s Economy Needs a Manufacturing Push

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