Indian economy shows resilience amid global challenges: NCAER Report

The Indian economy continues to be robust amidst global challenges, with the outlook having softened somewhat due to the slowing of some critical economic measures, according to the latest Monthly Economic Review of the National Council of Applied Economic Research (NCAER), as detailed by PTI.

Further, the report, released on August 28, underlines the fact that bank credit growth in both food and non-food sectors witnessed a deceleration in June 2024. This was more pronounced in personal loans and bank credit to the services sector, where growth rates declined.

However, the report from NCAER showed that the purchasing managers' index (PMI) for manufacturing and services declined marginally in July 2024 but still remained in an expansionary momentum. This particular index indicates that expansion remains in the sectors for manufacturing and services, although at a slower pace.

Another bright spot, according to the report, is that the growth of the Index of Industrial Production (IIP) registered moderate to lower growth in June 2024, on similar lines to the IIP for core industries. Such a trend reflects a slackening momentum in industrial output- an indication that will influence overall economic growth if sustained.

On a positive note, the report indicated that headline inflation at the Consumer Price Index in July 2024 moderated due to the easing of food inflation. Given the reduction of the increase of prices, thus would further mean that consumer prices have stabilised, which would be seen as a break for households and the business community. Likewise, wholesale price inflation eased during the month of July 2024, consolidating the trend of easing price pressures in the economy.

The merchandise trade deficit, however, has been widening, as the report pointed out, in July 2024. On the other hand, there was an increase in the services trade surplus sequentially in the same period, and that acted as a counterbalance to the overall trade scenario.