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Economic Times
a day ago
- Business
- Economic Times
India's growth engine loses steam in June, may get back on track soon
Live Events Favourable weather conditions (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel The Indian economy hit a soft patch in June with several high-frequency indicators such as goods and services tax (GST), UPI transactions, diesel consumption and car sales showing muted growth or even a contraction from a year the positive side, India's manufacturing activity strengthened and petrol consumption increased at a fast said this was a transitory moderation and growth is expected to gain momentum again, helped by a likely good monsoon, easing inflation and monetary relaxation by the RBI. The central bank has forecast growth at 6.7% in FY26. GST collections expanded at the slowest in the last 50 months at 6.2% in June, car sales dropped 6% in the month from a year ago and the UPI witnessed a slight decline in both transaction volume and value in June from May.'Around 6% growth in GST collections, coupled with less than 4% growth in advance tax collection for first quarter of FY26 does indicate softening of demand and cautious outlook,' said Pratik Jain, partner, Price Waterhouse & Co reported Tuesday that sales of air conditioners and refrigerators dropped sharply in the April-June quarter in the wake of milder-than-expected summer released on Monday showed India's industrial output growth slowed to a nine-month low of 1.2% in May, due to weak manufacturing growth along with contraction in mining and electricity sector companies announced new projects worth Rs 3.5 lakh crore in the quarter ended June, up from Rs 1.4 lakh crore in the same quarter last year, according to data from the Centre for Monitoring Indian Economy (CMIE). However, this was the slowest in four manufacturing activity rose to a 14-month high of 58.4 in June, driven by strong growth in output and new orders. The HSBC Purchasing Managers Index (PMI), compiled by S&P Global, was 57.6 in May and 58.3 in June UPI platform processed 18.40 billion transactions during the month, down from 18.68 billion in May. Transaction value dipped to ₹24.04 lakh crore from ₹25.14 lakh crore in May, according to data released by the National Payments Corporation of India (NPCI) on July consumption dipped 1.5% from a year earlier to 150.04 billion units in expect growth to pick up going ahead.'Despite a potential second-half slowdown, India is poised to grow close to trend, backed by favourable weather conditions, 0.6% GDP worth of policy support for urban consumers, and increased public capex,' said Anubhuti Sahay, senior economist, Standard Chartered the data indicates a mixed picture, the Indian economy is likely to have grown by 6.8% in the June quarter as the base is favourable, she said.
Time of India
a day ago
- Business
- Time of India
India's Growth Engine Loses Steam in June, may Get Back on Track Soon
The Indian economy hit a soft patch in June with several high-frequency indicators such as goods and services tax (GST), UPI transactions, diesel consumption and car sales showing muted growth or even a contraction from a year earlier. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads The Indian economy hit a soft patch in June with several high-frequency indicators such as goods and services tax (GST), UPI transactions, diesel consumption and car sales showing muted growth or even a contraction from a year earlier. On the positive side, India's manufacturing activity strengthened and petrol consumption increased at a fast said this was a transitory moderation and growth is expected to gain momentum again, helped by a likely good monsoon, easing inflation and monetary relaxation by the RBI. The central bank has forecast growth at 6.7% in FY26. GST collections expanded at the slowest in the last 50 months at 6.2% in June, car sales dropped 6% in the month from a year ago and the UPI witnessed a slight decline in both transaction volume and value in June from May. 'Around 6% growth in GST collections, coupled with less than 4% growth in advance tax collection for first quarter of FY26 does indicate softening of demand and cautious outlook,' said Pratik Jain, partner, Price Waterhouse & Co reported Tuesday that sales of air conditioners and refrigerators dropped sharply in the April-June quarter in the wake of milder-than-expected summer temperatures. Data released on Monday showed India's industrial output growth slowed to a nine-month low of 1.2% in May, due to weak manufacturing growth along with contraction in mining and electricity sector companies announced new projects worth Rs 3.5 lakh crore in the quarter ended June, up from Rs 1.4 lakh crore in the same quarter last year, according to data from the Centre for Monitoring Indian Economy (CMIE). However, this was the slowest in four manufacturing activity rose to a 14-month high of 58.4 in June, driven by strong growth in output and new orders. The HSBC Purchasing Managers Index (PMI), compiled by S&P Global, was 57.6 in May and 58.3 in June UPI platform processed 18.40 billion transactions during the month, down from 18.68 billion in May. Transaction value dipped to ₹24.04 lakh crore from ₹25.14 lakh crore in May, according to data released by the National Payments Corporation of India (NPCI) on July consumption dipped 1.5% from a year earlier to 150.04 billion units in expect growth to pick up going ahead.'Despite a potential second-half slowdown, India is poised to grow close to trend, backed by favourable weather conditions, 0.6% GDP worth of policy support for urban consumers, and increased public capex,' said Anubhuti Sahay, senior economist, Standard Chartered the data indicates a mixed picture, the Indian economy is likely to have grown by 6.8% in the June quarter as the base is favourable, she said.
Time of India
a day ago
- Business
- Time of India
Factory activity at 14-month high
Live Events (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel New Delhi: India's manufacturing activity rose to a 14-month high of 58.4 in June, driven by strong growth in output and new orders, a private survey HSBC Purchasing Managers Index (PMI), compiled by S&P Global, was 57.6 in May and 58.3 in June manufacturing sector closed the first quarter of the current fiscal year on a strong note, with an average PMI reading of 58.1. It was 57.4 in the previous quarter and 58.2 a year earlier."Robust end-demand fuelled expansions in output, new orders and job creation," HSBC chief India economist Pranjul Bhandari forward, manufacturers remained positive in June. However, concerns around competition, inflation and shifting consumer preferences volumes in June grew at the fastest pace since April 2024, supported by efficiency gains, favourable demand and greater sales volumes. This acceleration was solely led by intermediate goods makers, however, with slowdowns in the consumer and capital goods segments, according to the orders saw their strongest expansion in nearly a year. Survey respondents attributed the increase to marketing efforts and rising in new export orders was the third fastest since March 2005. Companies noted demand from across the globe, with a mention of the US more frequently. Across sectors, consumer, intermediate and investment goods recorded faster growth."To keep up with strong demand - particularly from international markets, as evidenced by the substantial rise in new export orders - Indian manufacturing firms had to tap deeper into their inventories, causing the stock of finished goods to continue shrinking," explained Bhandari.
Economic Times
02-05-2025
- Business
- Economic Times
Cranking it up: Factory activity hits a 10-month high in April
Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads New Delhi: India's manufacturing sector logged its highest growth in 10 months, inching up to 58.2 in April from 58.1 in March, supported by strong sales and production, according to a private survey published HSBC Purchasing Managers Index (PMI), compiled by S&P Global, was 58.8 in April 2024. "Manufacturing output growth strengthened to a ten-month high on robust orders," said Pranjul Bhandari, India chief economist at increase in output was the highest since June 2024, with consumer goods makers recording the fastest increase, the report orders rose to a 14-year high, excluding January, at the start of this fiscal year. Survey respondents cited demand growth from Africa, Asia, Europe, the Middle East and the Americas. "The notable increase in new export orders in April may indicate a potential shift in production to India, as businesses adapt to the evolving trade landscape and US tariff announcements," said April 2, the US announced a reciprocal tariff on various countries, imposing 26% on Indian imports. Although President Donald Trump announced a 90-day pause until July 9, a baseline tariff of 10% remains in effect. While manufacturing PMI was negatively affected across Asia due to trade uncertainties, India emerged as an outlier. "Export-oriented economies in the region are bearing the brunt of the tariff hit, with new export orders in China, Korea having fallen sharply into contractionary territory," noted Nomura. In contrast, domestic-oriented economies like India and Philippines have shown resilience, it added. Manufacturing activity in China fell to 49 in April from 50.5 in March. Other countries such as Indonesia, Malaysia, South Korea, and Thailand also recorded a decline. Cost pressures also intensified in India. Input prices rose at the fastest rate in four months in April, with firms citing higher building maintenance, labour, leather, paper, rubber, steel and transportation to the survey, anecdotal evidence suggests that companies transferred cost increases to clients leading output prices to their highest level in 11.5 years. "Input prices increased slightly faster, but the impact on margins could be more than offset by the much-faster rise in output prices, of which the index jumped to the highest level since October 2013," Bhandari noted. To meet the output demand, manufacturers expanded their workforce. "Exactly 9% of survey participants took on extra workers, with a combination of permanent and temporary contracts reportedly being offered," the report mentioned.
Time of India
02-05-2025
- Business
- Time of India
Cranking it up: Factory activity hits a 10-month high in April
New Delhi: India's manufacturing sector logged its highest growth in 10 months, inching up to 58.2 in April from 58.1 in March, supported by strong sales and production, according to a private survey published Friday. #Pahalgam Terrorist Attack Pakistan reopens Attari-Wagah border to allow stranded citizens in India to return Key Jammu & Kashmir reservoirs' flushing to begin soon Air India sees Pakistan airspace ban costing it $600 mn over 12 months The HSBC Purchasing Managers Index (PMI), compiled by S&P Global, was 58.8 in April 2024. "Manufacturing output growth strengthened to a ten-month high on robust orders," said Pranjul Bhandari, India chief economist at HSBC. The increase in output was the highest since June 2024, with consumer goods makers recording the fastest increase, the report said. International orders rose to a 14-year high, excluding January, at the start of this fiscal year. Survey respondents cited demand growth from Africa, Asia, Europe, the Middle East and the Americas. "The notable increase in new export orders in April may indicate a potential shift in production to India, as businesses adapt to the evolving trade landscape and US tariff announcements," said Bhandari. On April 2, the US announced a reciprocal tariff on various countries, imposing 26% on Indian imports. Although President Donald Trump announced a 90-day pause until July 9, a baseline tariff of 10% remains in effect. While manufacturing PMI was negatively affected across Asia due to trade uncertainties, India emerged as an outlier. "Export-oriented economies in the region are bearing the brunt of the tariff hit, with new export orders in China, Korea having fallen sharply into contractionary territory," noted Nomura. In contrast, domestic-oriented economies like India and Philippines have shown resilience, it added. Manufacturing activity in China fell to 49 in April from 50.5 in March. Other countries such as Indonesia, Malaysia, South Korea, and Thailand also recorded a decline. Cost pressures also intensified in India. Input prices rose at the fastest rate in four months in April, with firms citing higher building maintenance, labour, leather, paper, rubber, steel and transportation costs. According to the survey, anecdotal evidence suggests that companies transferred cost increases to clients leading output prices to their highest level in 11.5 years. "Input prices increased slightly faster, but the impact on margins could be more than offset by the much-faster rise in output prices, of which the index jumped to the highest level since October 2013," Bhandari noted. To meet the output demand, manufacturers expanded their workforce. "Exactly 9% of survey participants took on extra workers, with a combination of permanent and temporary contracts reportedly being offered," the report mentioned.
