Wednesday, October 20, 2021
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Wednesday, October 20, 2021
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Indian Economy could have exit Recession in December 2020

Out of all eight indicators to track down the growth two factors improved in last month, five held at steady growth in last month and one worsened.

Experts say that India could exit the recession by the end of December last year as signs of gaining momentum in many businesses and consumer activities were seen in the month of January this year.

According to a report there are total eight indicators to track down the growth out of which two factors improved in last month, five held at steady growth in last month and one worsened. At present the growth has kept at 5 on the basis of average growth of last three months.

recession 1 1

The January reading points to a solid start for the new quarter, building on developing gains seen in the October-December period. Official data on Friday is likely to show that India exited a recession in the final three months of 2020, with economists in a survey forecasted a gross domestic product expansion of 0.5% from a year ago.

Business Activity

There was an expansion for a fourth straight month in January in India’s dominant services sector’s activities, with the pace of new work and and business activity both quickening from a month ago. The Markit India Services Purchasing Managers’ Index came in at 52.8 from 52.3 a month earlier. Pointer above 50 denotes an expansion.

recession 2.

Due to the higher sales and export orders, the manufacturing sector has also shown a growth as companies increased their production at a large scale. But the pressure of both the input and output price is likely to prevent the inflation from declining in the upcoming months.

Exports

The exportation gained too much last month mainly in the fields of gems and jewelry, iron ore and textiles and engineering goods.

recession 3

Consumer Activity

The demand for passenger vehicles increased around 11.4% in January from a year ago among which utility and two-wheelers were strongly demanded. In the surveys conducted the consumers also expressed that the currently economic situation is far better than the situation in November last year when the same surveys were conducted. The consumers also feel that their financial conditions are likely to improve soon.

recession 4

The credit grew nearly 6.5% from a year earlier as demand for credit were at lower extent in the month of January this year. The advance tax payments led to a tighter cash position leading to a little change in liquidity from the month of December.

Industrial Activity

Infrastructure goods and manufacturing sector showed an encouraging development in the quarter of October-December last year. However, industrial production rose 1% in December and production for capital goods just rose 0.6%.

The infrastructure makes up 40% of industrial production index got contracted by 1.3% in December from a year ago which was lower than the contraction of 2.6% in November.

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