BCG’s India Economic Monitor shares insights on the state of Indian Economy from the most recent month, capturing 30+ key macroeconomic indicators and comparing them with trends observed in recent months. These indicators include industrial activity, trade, financial services, economic sentiments and sector-wise trends.

Brief Summary for Latest Report

June 2024

Key highlights include:

GDP & National Income Aggregates:

• In Jan-Mar'24, India's real GDP grew by 7.8% YoY, surpassing RBI and analysts' forecasts.
• The robust growth was led by the industrial sector which grew by 8.6% YoY, driven by manufacturing and construction sub-sectors. Service sector also saw a substantial growth of 6.7% YoY. The agriculture sector experienced a relatively lower growth of 0.6% YoY due to El-Nino effect impacting the kharif crop.
• Key GDP components improved: gross fixed capital formation increased by 9.0% YoY, boosted by GoI's capital expenditure, while private consumption grew at a tepid 4.0% YoY, affected by a weak rural demand impacting overall mass consumption. Net exports contributed positively after three negative quarters.
  

High Frequency Indicators:

• In May'24, most high-frequency indicators showed moderate to high growth compared to the previous month. IIP moderated in Apr'24 after peaking in Mar'24 due to a slight decline in growth of manufacturing sector. Cement production also saw a decline, while power and steel consumption increased. Renewable energy generation declined in Apr'24, led by a decrease in solar energy generation. The auto sector registered significant sales growth across most segments, although 2W sales declined.
• On the trade front, the merchandise trade deficit widened to a seven-month high in May'24, driven largely by a surge in imports of crude petroleum products. The services trade surplus increased slightly due to a rise in IT and BPO services exports. Forex reserves continued to grow in May'24, partly due to an increase in foreign currency assets. FDI also improved, mainly due to a moderation in capital repatriation.
• Most BFSI indicators were on an upward trajectory in Apr-May'24. UPI transaction soared, with transaction value crossing 20Tn mark for the first time. NSE and BSE transactions registered a remarkable surge of 88% YoY. Life insurance premium also grew, driven by a rise in new business premium collected by LIC.
• In terms of macroeconomic indicators, CPI inflation eased to a 12-month low in May'24, driven by moderated core inflation and declining fuel prices. WPI inflation climbed to a 15-month high, spurred by rising prices of primary articles. Manufacturing and Services PMI declined due to slower new order growth, price pressures, and heat waves impacting production volumes and livelihoods. GST collections moderated in May'24 after a surge in Apr'24, however, posted a 10% YoY growth, led by domestic transactions. Analysts forecast GDP growth of 6.6%-7.2% YoY for FY25, with most agencies raising their projections.
  

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