Indian Economy Faces Softer Outlook Amid Global Uncertainties

The Indian economy remains resilient despite global uncertainties, according to the National Council of Applied Economic Research's Monthly Economic Review for August. The report highlighted moderation in bank credit growth and a marginal decline in the PMI, while inflation rates eased and the trade deficit widened in July 2024.

Amid global geo-political uncertainties, the Indian economy continues to show resilience. However, the outlook appears softer due to a moderation in some high-frequency indicators, as per the Monthly Economic Review for August released by the National Council of Applied Economic Research (NCAER).

The report highlighted a reduction in bank credit growth among scheduled commercial banks in June 2024. Similarly, personal loan credit growth and bank credit for the services sector have decelerated.

The Purchasing Managers' Index (PMI) for manufacturing and services slightly declined in July 2024 but maintained expansionary momentum. Growth in the Index of Industrial Production (IIP) and core industries also moderated in June 2024. Meanwhile, Consumer Price Index (CPI) headline inflation and wholesale price inflation both eased in July 2024, while the merchandise trade deficit widened and the services trade surplus grew sequentially.

(With inputs from agencies.)