1. Here are five factors that point towards economic uptick

Here are five factors that point towards economic uptick

While the inflation has gone up and even breached Reserve Bank of India's 4% target and the industrial output has been showing moderate growth, there are five other areas that point to an economic uptick in coming days.

By: | Published: January 3, 2018 1:22 PM
(Image: Reuters)

In the second quarter of the current fiscal, the GDP growth made a come back at 6.3% from a three-year low of 5.7% in the first quarter after disruptions caused by demonetisation and the GST destocking. Since then, while the inflation has gone up and even breached Reserve Bank of India’s 4% target and the industrial output has been showing moderate growth, there are five other areas which point to an economic uptick in coming days. Here are the five factors that are showing strong growth:

Manufacturing

According to ICRA, manufacturing is likely to display healthy expansion in volumes in Q3 FY 2018, which should result in a substantial improvement in capacity utilisation on a year-on-year basis. Elevated commodity prices, especially fuel prices, are likely to inflate input costs exerting pressure on manufacturing margins and GVA growth for this sector in Q3 FY 2018. The Nikkei India Manufacturing Purchasing Managers’ Index (PMI) also rose to 54.7 in December, a five-year high, as growth was recorded across all three monitored categories — consumer, intermediate and investment.

Indian manufacturers upped their staffing levels at the end of the year. In fact, job creation accelerated to the strongest since August 2012, the survey said.

Gross Value Added (GVA)

Commitment towards fiscal consolidation at the central and state levels, normal monsoon and efficiency gains related to the GST suggest 50 bps improvement in the GVA growth in FY19. The PMI for the Future Output Index also signalled the strongest level of confidence in three months, with more than one-in-five survey participants forecasting higher production.

Car Sales

Car Sales in December have also gone up on the back of positive consumer sentiments on the expectation of the economic revival. Bajaj Auto has reported 29.72% increase in total sales in December at 2,92,547 units as against 2,25,529 units in the same month the previous year. Similarly, other car companies, too, reported an increase in car sales between 11% and 5%.

8 Core Sector

Activity in the eight core sectors of the economy accelerated to a 13-month high of 6.7% in November, with growth being propelled by the steel and cement sectors. The index of core industries had grown by 5% in October. In November, the cement sector grew at a record high of 17.3% compared with a contraction of 1.34% in October.

Exports

Exports in the month of November rose 30.55%, which led to the narrowing of trade deficit to $13.82 billion. According to data by the Commerce Ministry, November exports rose 30.55% to $26.19 billion, after the government began refunding GST returns.

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