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India's services sector showed robust expansion in October, per the <keyword id="22267674" type="General" weightage="20" keywordseo="HSBC-India-Services-PMI" source="keywords">HSBC India Services PMI</keyword> (Purchasing Managers' Index), which rose to 58.5 last month, up from September's ten-month low of 57.7. October's figures managed to exceed even the long-run PMI average of 54.1, largely on the back of a strong sales pipeline and elevated demand. Employment, or job creation in this sector accelerated to its fastest growth rate in 26 months. Anticipating solid, sustained demand in the near term, firms added new employees at the most rapid pace in over 2 years. October also saw <keyword id="23834175" type="General" weightage="20" keywordseo="input-costs-rise" source="keywords">input costs rise</keyword> at their fastest pace in 3 months, indicating renewed demand and economic activity in the country. The ISM Services PMI, an indicator of the economic health of the US, also exceeded expectations, reaching 56.0 compared to the forecasted 53.8, suggesting strong growth within the services sector. "During October, the Indian services sector experienced strong expansions in output and consumer demand, as well as job creation, which achieved a 26-month high," said Pranjul Bhandari, Chief India Economist at HSBC. The sector saw increased business activity across multiple fronts, with export sales showing significant growth and companies reporting stronger demand from international markets including Africa, Asia, the Americas, the Middle East, and the UK. However, industry experts remain cautiously optimistic about the sector's prospects. Suman Chowdhury, Chief Economist at Acuité Ratings &amp; Research, noted that while the October recovery is promising, several factors warrant careful monitoring. “The recovery in the PMI indices in October 2024 is promising for the second half of the fiscal after the dip in several high-frequency indicators in September 2024. Industrial and service activity has expectedly received a boost from the anticipated spike in consumption demand in Q3 FY25, driven by the festivities and the marriage season," she said. Chowdhury added that it will be crucial to monitor the sustainability of these PMI indices at these elevated levels, given the reported weakness in urban demand in Q2 as flagged by FMCG companies. She also noted that potential increases in wholesale and core retail inflation, combined with higher input costs and wage pressures, could delay expected interest rate cuts. RBI governor Shaktikanta Das also noted that inflation and CPI figures for October might be elevated, pushing ahead any chances of interest rate cuts in the near future. Acuité Ratings &amp; Research maintains its GDP growth forecast at 7.0% for FY25 while acknowledging the multiple downside risks that will require close observation in the coming months.

India's Services Index jumps to 58.5 in October as employment grows the fastest in 26 months

<ul><li>Inflation has been eating into the purchasing power of lower and middle income groups with many essentials’ sales falling.</li><li>Majority of the upper and upper middle class respondents saw their household incomes go up more than inflation.</li><li>There is a dichotomy seen in online festive sales too as premium products are bought with discounts and purchase options say experts. </li></ul>There are two Indias within the great sub-continent. One where the day-breaking drink of tea has become dearer for many this year and the other half is doubling down on wine purchases. Neither of them are affected by the base effect of last year. <keyword id="2653343" type="General" weightage="20" keywordseo="tea-sales" source="Orion">Tea sales</keyword> were down last year too, and <keyword id="806378" type="General" weightage="20" keywordseo="wine-sales" source="Orion">wine sales</keyword> were up — darkening the ‘K’ line on economic recovery charts. Madan Sabnavis, the chief economist of Bank of Baroda calls it a schizophrenic pattern of consumption. “Sales are doing better in categories where price does not matter,” he tells Business Insider India. <div type="image" title="grocery demand" msid="104810160" hostid="261" caption="&amp;lt;p&amp;gt;Source: Pixabay &amp;lt;/p&amp;gt;"></div> It’s discretion not price The categories of goods where price matters are seeing low growth in output – a reflection of demand. Some of the casualties are detergent powders, groundnut oils, shampoos and hair dyes. Their output fell between April to August 2023, compared to the year before, as per BoB economics research. Inflation has a more indirect effect on these purchases. For example, tea and shampoo saw moderate inflation but their demand fell. Inflation was high in coffee, toothpaste and soaps but their demand grew. “The generalized inflation factor has been at work where real income has come down thus leading to lower purchasing power,” said BoB. In a survey conducted by UBS, about 46% of respondents said that they’re buying less personal care and packaged food compared to last year. For purchase of home care products, the respondents were largely neutral versus last year, it added. India’s largest FMCG player Hindustan Unilever with a large presence across rural and urban India has seen a direct impact of it in the quarter that ended in September 2023. Its overall urban volumes grew 3% and rural volumes fell 1%. “Rural recovery is likely to remain gradual,” the company said in its investor presentation indicating that the situation might not see any dramatic recovery in the coming months. Rural India saw reverse migration during the pandemic, but not all of them have gone back, opines Sabnavis. A chunk of downtrading is also being seen in urban areas amongst income groups that are facing the heat of inflation, experts add. At the other end This is, however, only one half of the story. At the other end, many Indians are not blinking while making discretionary purchases. A majority of the upper and middle class respondents – 65% – surveyed by UBS, saw their household incomes go up more than inflation. “The top 20% of the population account for the bulk of discretionary consumption. The survey results support our view that affluent consumers‘ income levels are holding up, as reflected in corporate wage growth that continues at double digits,” said UBS. Lalit Jhawar, co-founder and CEO, LandCraft Retail says that high-end gourmet products in urban areas have been steadily increasing over the last few years. He owns a luxury gourmet retails store- Food Square in Mumbai, which sells cheeses, truffles, caviar, artisanal breads and all the other international food items. “Affluence in urban areas has grown, resulting in a larger number of consumers with higher discretionary income,” Jhawar tells Business Insider India. Online sales: A story of dichotomy Another sign of higher spending is seen in the e-commerce festival sales. The first week of the many festival discount sales saw ₹47,000 crore worth of goods being sold, which is 19% higher than last year, says Redseer Consulting. Online sales, which now sees a good measure of metro and demand from Tier 2 and Tier 3 cities, is showing a dichotomy as well, say experts. “Two Indias have come into play where one India is saving up and waiting for prices to come down to clinch a good deal on premium products. On the other hand, there are low-value product sales i.e value-for-money purchases that are being bought more frequently,” said Abhishek Tandon, engagement manager at Redseer Strategy Consultants. The sale season, which is manna for bargain hunters, is also enthused by the number of Buy Now Pay Later and EMI options. “When it comes to big ticket purchases, premiumization is bolstered by financing options and discounts that make it affordable,” adds Tandon. In the pre-festive period between April and August,however, most consumer durable sales were in a negative zone, due to the high-base effect of last year, says Bank of Baroda’s report. Refrigerators, mobiles, readymade garments all showed a negative output – also indicating that discounts play a large role in discretionary purchases. Indian consumers have always been complicated and price has always played a big role in purchase decisions, choice of brands and more. But it’s no longer a linear story. One end of the market, driven by affluence, is veering towards premium purchases. The other end is looking for ways to survive with less in hand as inflation is eating into their purchasing power. SEE ALSO <a href="https://www.businessinsider.in/stock-market/news/mamaearth-this-fmcg-scion-is-all-set-to-gain-a-windfall-from-honasa-ipo/articleshow/104721052.cms">This FMCG scion is all set to gain a windfall from Honasa Consumer IPO</a> <a href="https://www.businessinsider.in/careers/news/genzs-millennials-wants-to-be-back-to-offices-even-as-costs-pinch/articleshow/104700780.cms">GenZs, millennials want to be back to offices even as costs pinch</a>

Wine vs Tea: India’s consumption trends show a sharp divergence

<keyword id="6354387" type="General" weightage="20" keywordseo="jewellery" source="Orion">Jewellery</keyword> consumption, in terms of value, is expected to grow by 10-12 per cent in this financial year, mainly on account of increase in <keyword id="46002" type="General" weightage="20" keywordseo="gold-prices" source="Orion">gold prices</keyword>, a report said on Friday. Rating agency <keyword id="6354972" type="General" weightage="20" keywordseo="icra" source="Orion">Icra</keyword> has revised upward its forecast for the year-on-year (YoY) <keyword id="19910440" type="General" weightage="20" keywordseo="domestic-jewellery-consumption" source="Orion">domestic jewellery consumption</keyword> growth (in value terms) in FY24 to 10-12 per cent from the earlier estimates of 8-10 per cent, primarily driven by the rise in gold prices. Jewellery consumption is estimated to have risen by more than 15 per cent YoY in the first half of FY24, aided by stable demand during 'Akshaya Tritiya', a festival considered auspicious for buying precious metals, and higher gold prices. However, Icra projects the growth rate to moderate to 6-8 per cent in the second half of this financial year due to sustained tepid rural demand amid persistent <keyword id="22195" type="General" weightage="20" keywordseo="inflation" source="Orion">inflation</keyword>. After remaining volatile between December 2022 and April 2023, gold prices were relatively stable in the first half of FY24, although up 14 per cent compared to the average prices during the year-ago period, noted the report. The elevated price levels supported revenue expansion of most jewellery retailers in the face of muted volume growth, it said. The ongoing tensions in the Middle East and the evolving global macro-economic environment could keep gold prices elevated in the near term. The spike in gold prices since early October 2023 and persistent inflationary headwinds remain key risks to demand, it stated. "Jewellers of the organised market is projected to record a healthy revenue expansion of 15-18 per cent YoY in FY24 on the back of their planned retail expansions and a gradual shift in consumer preferences towards branded jewellers. The organised jewellery retailers are expected to outperform the industry over the medium term supported by tailwinds from accelerated formalisation of the industry," Icra Vice President and Sector Head Sujoy Saha said. Icra has projected some moderation in FY24 in the operating margins of organised players owing to the front-loaded operating costs for planned store additions and increased advertising expenditure in the face of rising competition. Nevertheless, the benefits of economies of scale are likely to support the operating margins, which are estimated to hover in the range of 7.5-8 per cent in the near to medium term. Despite the projected increase in debt levels to fund the inventory for new stores, the debt protection metrics for the players are estimated to remain comfortable. "The organised jewellers had recommenced their retail expansion in FY23, after a brief hiatus in FY21 and FY22, with the store count estimated to have risen by more than 20 per cent during the year. The momentum is likely to continue over the near to medium term with an estimated increase in store count by 18-20 per cent YoY in FY24, supporting their revenue growth," Saha added.

Jewellery consumption to grow by 10-12 pc value-wise in FY24 amid rise in gold prices: Report

<ul><li>Manufacturing, mining and services sectors contributed to <keyword id="44910" type="General" weightage="20" keywordseo="gdp-growth" source="Orion">GDP growth</keyword> in Q2.</li><li>The GVA in the manufacturing sector showed a growth of 13.9% in the second quarter.</li><li>The output of eight key infrastructure sectors jumped 12.1% in October 2023. </li></ul>India's economy grew 7.6% in the September quarter of this fiscal and remained the fastest-growing large economy, mainly due to better performance by manufacturing, mining and services sectors, the government data showed on Thursday. The gross domestic product (GDP) expanded by 6.2% in the July-September quarter of 2022-23. India remained the fastest-growing major economy, as China posted a 4.9% growth in July-September 2023. “The 7.6% GDP growth in the September quarter has far exceeded the RBI’s 6.5% estimate for the period, ensuring that India remains on the growth path despite multiple global headwinds arising from economic and geo-political uncertainties,” said Vivek Rathi, National Director Research, Knight Frank India. Manufacturing picks up pace, agriculture slows The gross value added (GVA) in the manufacturing sector showed a growth of 13.9% in the second quarter of the current fiscal compared to a contraction of 3.8% in the year-ago period. “Manufacturing and construction were the clear leaders with growth of 13.9% and 13% respectively. In the case of manufacturing, high profit growth contributed to the buoyancy while construction was up due to housing as well as government capex,” said Madan Sabnavis, chief economist at Bank of Baroda. As per the data, the output (GVA) in the 'mining and quarrying' accelerated to 10% in the second quarter against a contraction of 0.1% a year ago. Electricity, gas, water supply and other utility services' grew by 10.1% from 6.1%. “Double digit growth in the industry sector, especially in manufacturing and construction is suggesting that businesses ramped up production to meet the pent-up demand just before the festivals,” said Rumki Majumdar, Economist, Deloitte India. According to the <keyword id="7734679" type="General" weightage="50" keywordseo="national-statistical-office" source="Orion">National Statistical Office</keyword> (NSO) data, the agriculture sector GVA growth decelerated to 1.2% in the September 2023 quarter from 2.5% a year ago. This was expected due to seasonal effect, say economists. The construction sector recorded a growth of 13.3% year-on-year in the second quarter compared to 5.7%. The expansion in financial, real estate and professional services' GVA was 6%, down from 7.1% in the year-ago quarter. “As a derived demand, the upturn in the capex cycle and the strengthening domestic profile of consumers should prove to be strong drivers of India's real estate market. The continuation of the real estate upcycles, coupled with the increased focus on infrastructure development will support the sustained growth of the construction sector,” said Rathi. Meanwhile, the output of eight key infrastructure sectors jumped 12.1% in October 2023 against 0.7% expansion in the year-ago period on account of a sharp uptick in production of coal, steel, cement and electricity, according to the official data. The government's fiscal deficit at the end of October touched 45% of the full-year budget estimate, according to data released by the Controller General of Accounts (CGA) on Thursday. “Personal consumption growth lost momentum and grew only 3.1% YoY. However, it could be a possibility that consumers postponed their spending for the upcoming festive months and may have reallocated funds for investments. Higher consumer spending may get reflected in the October-December quarter,” said Majumdar. (With PTI inputs)

India's GDP grows 7.6% in September quarter, beats RBI estimates

<ul><li>As many as 12,602 housing units were registered in Mumbai between Navratri until Bhai Dooj.</li><li>The festive fervour has made the state exchequer richer by ₹1,257 crore.</li><li>Approximately 40% of residential units are sold during the last quarter of the year, say experts. </li></ul>India’s consumption story is a tale of two Indias. Even as consumer companies are battling a slowdown, demand for real estate has not cooled despite rising interest rates. It’s been a great festival season for Mumbai’s real estate developers, which is one of the most expensive real estate markets in the world. As many as 12,602 units were registered between Navratri until Bhai Dooj – that’s October 15-November 15, 2023. It represents a 30% growth over last year’s festival period, as per <keyword id="151748" type="General" weightage="50" keywordseo="knight-frank-india" source="Orion">Knight Frank India</keyword>. Thanks to as many as 407 units being registered per day, the festive fervour has made the state exchequer richer by ₹1,257 crore. “Mumbai city embraced the auspicious festive period with a remarkable surge in property registrations, reflecting a heightened commitment to high-value investments. As the festive season continues, registration volumes are expected to remain robust, fuelled by favourable market conditions, including moderately increasing property prices and stable policy interest rates,” said Shishir Baijal, Chairman &amp; Managing Director, Knight Frank India. The surge was much expected due to a combination of factors like stable interest rates and the growing love for more spaces. Most experts have been betting on the real estate sector’s prospects this year. They also hope that 2023 as a whole will surpass 2022’s home sales. Moreso, the festive season is key for most developers because a large chunk of home sales take place during the period. “Approximately 40% of residential units sold annually close during the last quarter of the year. According to industry estimates, house sales in 2023 will likely be 20–30% higher than in 2022, given the current holiday season and the fact that sales are already approaching 2022 levels,” said Manju Yagnik, VC of Nahar Group. Anshuman Magazine, Chairman &amp; CEO - India, South-East Asia, Middle East &amp; Africa, CBRE also said that he expects the festive season sales to boost the momentum already seen through 2023. Developers too have been offering schemes and incentives to lure in buyers, especially first-time buyers. “As the residential cycle matures amidst inflationary pressures, we have witnessed increasing demand in the mid-end and premium categories. Conversely, the premium and luxury segment is expected to emerge as a sought-after investment avenue, particularly for HNIs and NRIs seeking to safeguard their investments amid global macroeconomic uncertainties,” said Magazine.

Mumbai property registrations jump 30% during festive season compared to last year

<ul><li>The first four days of the <keyword id="1549946" type="General" weightage="20" keywordseo="ecommerce-sales" source="Orion">ecommerce sales</keyword> season clocked ₹29,000 crore, says Redseer.</li><li>This year, Indian shoppers hurried to book products ahead even before the sales season started.</li><li>The Pre-book or Price lock feature allows users to lock-in the prices of high value products, before the sale. </li></ul>It’s weeks before Dussehra and Diwali, but Indians are not holding their horses when it comes to shopping online. The first four days of the ecommerce sales season clocked in sales to the tune of ₹29,000 crore, says Redseer. This is around 16% higher than the gross merchandise value (GMV) in the same period last year. The report adds that the fear-of-missing-out or FOMO mood has set into Indian shoppers who have hurried to book products even before the sales season started. Many consumers took advantage of the ‘Pre-book/Price lock’ features, the report said. The industry-first feature allows users to lock-in the prices of high-value products, even before the festive sale starts. “Due to this feature, along with attractive deals on high average selling price (ASP) items and easy financing options like No-Cost EMIs, consumers locked in their choices in advance to avoid FOMO on these deals later during the actual festive sale period,” said Redseer. Accordingly, Day 0 or the Early Access Day, saw a 10 times increase in sales over the business as usual (BAU) for e-commerce websites running sales. The first day saw an over 7 times increase in sales over BAU. "Premiumization as a theme is clearly being seen in this festive season as consumer discretionary spending in high ticket categories has done well. Further, the steady growth in overall sales and high ASP categories reinforces the belief in the strength of the Indian consumption story,” said Mrigank Gutgutia, partner, Redseer. Categories like fashion, beauty &amp; personal care, home, amongst others may gain traction in the second half of the Week 1 festive sale, the consulting firm says. Apart from quantity, the quality of this year’s sales are also improving. E-commerce companies have increased focus on faster deliveries and improved customer experience. That has led to lower cancellations which is generally rife during the festive surge in sales. Moreover, the pre-book feature has allowed them to gauge demand better prior to the sale period — be ready for surge and fulfill orders in a quick and orderly manner.

Shopping FOMO? Indians spend ₹29K cr online ahead of festive season

<ul><li><keyword id="412367" type="General" weightage="20" keywordseo="consumer-sentiment" source="Orion">Consumer sentiment</keyword> has improved and Indians are eager to celebrate this <keyword id="36208" type="General" weightage="20" keywordseo="festive-season" source="Orion">festive season</keyword>, says a survey.</li><li>Consumers are keen to splurge on luxury goods, beauty and personal care products, consumer durables and more.</li><li>With a surge in inquiries, real estate players expect 20% growth in sales this season.</li><li>Online retailers are also expected to see 18-20% in gross merchandise value. </li></ul>Indians are gearing up for the festival season that kicks off with Ganesh Chathurthi this week. As the auspicious months arrive, the real estate sector is upbeat with new launches and more, but the shadow of the monsoons lingers over automobile dealers and jewellers. This season, Indians are not shying away from high-profile purchases this festive season as the real estate sector has reported healthy inquiries – thanks to the high consumer sentiment due to heightened economic activity. “As we approach the festive season, we are already witnessing a surge in inquiries and we are expecting around 20% growth compared to last year’s festive season. This naturally offers a context for consumers to go in for their dream homes as the overall climate is geared towards sustained demand,” said Ramani Sastri, chairman &amp; MD of Sterling Developers. The demand for new homes has been growing and has hit an all-time high, and realtors expect a windfall this season, aided by growth in new launches especially in the mid and luxury categories. Rising homeownership amongst millennials, aided by the higher disposable income and willingness to upgrade to larger, luxurious spaces equipped with better amenities. “Developers are optimistic about the desire for homeownership and anticipate that with attractive schemes and offers, the uptake for homes across cities will be healthy. Further, the unchanged repo rates and the appraisal cycle that coincides with the festive season, will provide a much-needed boost to the residential sales figures in the coming months,” said Kanika Gupta Shori, founder and COO, Square Yards. Consumer goods are also expected to see traction this season, thanks to the underlying need to improve living standards combined with the surge in the need for comfort in households. “People are upgrading to a more premium lifestyle and our products, with their distinct combination of technology, ultra-modern look and cutting-edge features, will continue to find traction. The focus on launching new products, coupled with good deals and enhanced distribution, especially in the tier-2 and tier-3 cities, should help brands during the festive season ahead,” said Parag Kulkarni, senior VP-international and president, A O Smith India, who are known for their water heaters and purifiers. Better than last year The festive mood is also high for other purchases like clothes, luxury goods and more. A survey by global technology company The Trade Desk says that 70% of Indians are ready to spend more this Diwali – that’s a 35% higher than last year. The year of 2022 was one of the first festival seasons which was not masked by fear of Covid-19 in the last few years. This year, sales are expected to be better. “With the broader economy coming back to business-as-usual levels, this festive season is likely to catalyze online consumption demand,” said a report by Redseer. With regards to online shopping, the growth in gross merchandise value (GMV) of sales is expected to be 18-20% higher than what it was in the 2022 festival season – which saw a 10% growth. “The planned increase in consumer spend is led primarily by consumers’ bullish view that their financial situation has improved according to 53%, and consumers’ eagerness to celebrate a lot more this year as per 49%,” The Trade Desk says. A significant majority ie. 84% expressed interest in buying luxury goods and apparel, with 80% on gold, as per Trade Desk survey. Amongst those who plan to spend more, 68% are more likely to spend more on new clothes, the rest on food items, gifts for family and more. Within e-tailing, beauty and personal care products, home and general merchandise, fashion are expected to see high demand – with persistent premiumization. Auto and gold sales rely on rural demand for growth uptick After an upbeat August sales when sales of passenger vehicles and three-wheelers hit an all-time high, the outlook for auto sales too is upbeat. “Based on the performance of last month (August) , we are even more optimistic for demand to pick-up during the festive season, enabled by positive economic outlook and the revival of monsoon after a deficit in August,” said Vinod Aggarwal, the president of industry body Society of Indian Automobile Manufacturers (SIAM). Two-wheeler sales, however, remained dull due to subdued rural demand on account of insufficient rainfall that could temper sales growth going ahead, as per experts. Consumer demand in this segment has remained ‘ambivalent’ according to yet another industry body Federation of Automobile Dealers Association (FADA). The monsoons have been in a deficit for most of the season, while a pick-up is expected in September. Without that pick-up, combined with low reservoir levels can have both direct and indirect effect on consumption both in rural and urban areas. Low sowing across two cropping seasons can have a devastating effect on inflation — driving down consumer sentiment across auto and other sectors. “After a prolonged period of stagnation, rural demand is showing signs of a positive resurgence. However, this recovery remains tenuous, contingent on the performance of the final phase of the monsoon season. Such developments would be particularly inopportune as they would coincide with the peak of India's festive season, notably Navratri and Deepawali, traditionally periods of heightened consumer activity,” said FADA. Jewellery sales too could be clouded by inflation, say experts, even as the yellow metal’s prices have been inching down on account of various macro economic factors. “With the start of the festive and wedding season, domestic gold demand is expected to gain impetus. However, higher inflation and weaker rural income on account of a less than ideal monsoon could potentially weigh on demand,” says Ghazal Jain, fund manager, alternative investments at Quantum Mutual Fund. Others, however, feel that consumers would be keen on addition to their physical old portfolio driven by the lower prices. Their prices have come down from a high of ₹61,750 per 10 gm in May to ₹59,000 per 10 gm currently — a healthy 20-25% drop from the recent surge. “Festive seasons have consistently witnessed a surge in physical gold demand, particularly in the realm of ornamental jewellery, as consumers seek the latest and trendiest designs. After a period of subdued festivities, the recent years have seen a resurgence in celebrations, rekindling the enthusiasm for gold,” said Jateen Trivedi, VP-research at LKP Securities. SEE ALSO <a href="https://www.businessinsider.in/careers/news/over-43-of-indian-employees-are-struggling-with-anxious-depressed-or-isolated/articleshow/103661485.cms">More than half of Indian employees are logging off from work exhausted</a> <a href="https://www.businessinsider.in/business/news/soap-opera-fmcg-players-kick-off-price-war-to-bring-back-whats-lost/articleshow/103657469.cms">Soap Opera: FMCG players kick off price war to bring back what’s lost</a>

India switches on its shopping mode as festivals approach, sales set to jump 20%

New Delhi [India], May 18 (ANI): India is poised to grow at 6.2 per cent in the current financial year 2023-24 with improving macro stability indicating that the monetary policy will not have to turn restrictive, <keyword id="48670" type="General" weightage="80" keywordseo="morgan-stanley" source="Orion">Morgan Stanley</keyword> has said. In a report titled "Asia Economics: The Viewpoint: Addressing the Pushback to Our Constructive View", authored by Chetan Ahya, Derrick Y Kam, Qiusha Peng, and Jonathan Cheung, Morgan Stanley said India enjoys tailwinds -- both cyclical and structurally. "We see healthy balance sheets sustaining the robust trends in domestic demand. Improving macro stability means the monetary policy will not have to turn restrictive, allowing the economic expansion to continue," the report said. In the three-day deliberations of the <keyword id="6375120" type="General" weightage="50" keywordseo="monetary-policy-committee" source="Orion">Monetary Policy Committee</keyword> of the <keyword id="6354335" type="General" weightage="50" keywordseo="reserve-bank-of-india" source="Orion">Reserve Bank of India</keyword> in early April, Governor <keyword id="6359111" type="General" weightage="50" keywordseo="shaktikanta-das" source="Orion">Shaktikanta Das</keyword> said the central bank has projected India's real GDP growth for 2023-24 at 6.5 per cent. Late last year, investors had raised concerns over India's growth momentum as growth indicators had slowed post the festive season in October. However, growth indicators reaccelerated in early 2023. For instance, the services Purchasing Managers' Index is at a 13-year high and the manufacturing PMI is near an 11-year high, both well above that of other economies; passenger vehicle sales are at 131 per cent of pre-covid levels, real goods and services tax collections are 35 per cent higher than pre-covid. Against those thriving fundamentals, Morgan Stanley's chief India economist Upasana Chachra expects GDP growth of 6.2 per cent for 2023-24, higher than the wide expectation of 5.8 per cent. Further, clearing doubts about India's rural spending, the Morgan Stanley report said it is of the view rural spending will strengthen. "As we noted previously, it is the case that rural and lower-income consumers are taking longer to revive spending as they have not received stimulus, and they had suffered a loss of purchasing power as inflation rose. But, as these effects fade, spending by rural and lower-income consumers is recovering. Indeed, real agricultural credit growth - a proxy for rural activity - has rebounded to the highest level since 2016, boding well for rural employment and consumption," the report read. (ANI)

India poised to grow at 6.2% in 2023-24 says Morgan Stanley

<ul><li>Food basket inflation was at 9.53% in December 2023, up from 8.7% in November.</li><li>The core inflation stood at 3.8%, moderating from 4.% in November.</li><li>India's industrial growth rate slumped to an 8-month low of 2.4% in November. </li></ul>Retail inflation inched up marginally to a four-month high of 5.69% in December 2023, mainly on account of higher food prices, according to official data released on Friday. The inflation based on Consumer Price Index (CPI) was at 5.55% in November 2023 and 5.72% in December 2022. In August 2023, inflation touched a high of 6.83%. As per the data released by the <keyword id="20070866" type="General" weightage="20" keywordseo="national-statistical-office" source="keywords">National Statistical Office</keyword> (NSO), retail inflation in the food basket was at 9.53% in December 2023, up from 8.7% in the preceding month and 4.9% in the year-ago month. “While persistent rise in the food prices contributed to an uptick in inflation in December 2023, the core inflation has continued to moderate indicating signs of easing price pressure for the households. A continual moderation in inflation is supportive of growth in the consumption driven sectors, said <keyword id="20169700" type="General" weightage="20" keywordseo="vivek-rathi" source="keywords">Vivek Rathi</keyword>, national director of research at Knight Frank India. The core inflation stood at 3.8%, moderating from 4.% in November. As per RBI’s forecast, FY24 inflation would be at 5.4%. The softer numbers that came in December could undershoot the numbers marginally,” said <keyword id="20169699" type="General" weightage="20" keywordseo="upasna-bhardwaj" source="keywords">Upasna Bhardwaj</keyword>, chief economist at Kotak Mahindra Bank. Experts expect RBI to keep its keep repo rate and policy stance unchanged in the February policy. The <keyword id="19899810" type="General" weightage="20" keywordseo="reserve-bank-of-india" source="keywords">Reserve Bank of India</keyword> (RBI) has been focussed on bringing retail inflation under 4% which is its target. “We expect the RBI to allow liquidity conditions to ease in the coming months to let the operating target rate soften towards the repo rate before shifting stance— a move which is likely in 1QFY25,” said Bharadwaj. Manufacturing drags November industrial growth to 2.4% India's industrial growth rate slumped to an 8-month low of 2.4% in November from a 16-month high of 11.6% in October, data released by the Ministry of Statistics and Programme Implementation on Friday showed. In November 2022, the country’s industrial production had grown by 7.6%. The growth rate for November was dragged down by the manufacturing sector, which slowed to a crawl of 1.2 per cent on a year-on-year basis after having posted an increase of 10.2 per cent in October. The sharp slowdown in manufacturing output growth, which accounts for more than three-fourths of the index of industrial production (IIP), was partly attributed to the large number of holidays in November on account of festivals due to which the working declined. The IIP figure has been pulled down by the manufacturing sector which posted the lowest annualised growth of 1.2% in 13 months after a solid momentum in the early part of the fiscal. While moderation in industrial activity is typically seen in the post-festive season, this may also be an indication of an expectation of demand slowdown in the last quarter of the fiscal, he added. The electricity generation also grew at a slower pace of 5.8% as compared to a high double digit growth of 20.4% in October. Similarly, the mining output growth declined to 6.8% from 13.1% in October. “Industrial output for Nov-23 has disappointed even factoring in the impact of the festival holidays during the month and the adverse base factor. IIP has recorded a modest growth of 2.4% YoY, the lowest print in eight months since March 2023," said Suman Chowdhury, chief economist &amp; head of research of Acuite Ratings &amp; Research. There has also been a contraction in both consumer durables and non-durables output in Nov-23, leading to an overall contraction of 4.2 per cent YoY in the consumer goods sector. “The growth indicators from the industrial production print however seem to be uneven. Output from most of the key industries have witnessed moderate growth, however, due to a high statistical base. However, the consumer durable output, which is consumption reflection, contracted by 5.4%. This can be concerning as sustained consumption growth is the key to keep the economic growth momentum continuing,” said Rathi. (With inputs from PTI &amp; IANS)

Retail inflation inches to 4-month high in Dec; IIP growth slips to 8-month low in Nov

Consumer spending in India is soaring during the festive season, with people splurging on cars, smartphones, TVs and other items, boosting the country's economic growth, media reports said. Sales at e-commerce platforms like <keyword id="18635" type="General" weightage="80" keywordseo="amazon" source="Orion">Amazon</keyword> and <keyword id="6354742" type="General" weightage="80" keywordseo="flipkart" source="Orion">Flipkart</keyword> surged by almost a fifth in the first week of the festive season, compared to the same period last year. Digital payments made via Unified Payments Interface (<keyword id="6358921" type="General" weightage="100" keywordseo="upi" source="Orion">UPI</keyword>) also increased by 40# in October from a year earlier. Economists see easing inflation and rising wages, especially in rural areas. Consumer confidence hit a four-year high in September, according to the latest figures by the central bank, and demand for bank loans is near a 12-year high despite interest rate hikes this year. According to the International Monetary Fund (IMF), India's GDP will grow at the fastest rate among major economies in 2023 and 2024, at 6.3% in both years. Aside from the festive season, the Cricket World Cup and the forthcoming wedding season are likely to boost consumption. Online sales from Amazon, Flipkart and others reached 47 billion rupees ($565 million) in the week through October 15, said the report by the market research firm Redseer Strategy Consultants. High average selling price (ASP) items such as mobiles, electronics and large appliances emerged as the largest contributor to the sales, driving 67# of the total sales, it mentioned. Flipkart Group continued to assert its leadership in week 1 of the festive season sale, further gaining market share over last year's sales to reach 63# in terms of Gross merchandise value (GMV). Amazon, Flipkart, Myntra and others began the festive season sales from October 7 which is expected to reach Rs 90,000 crore worth of online GMV in the festive month -- up 18-20# from last year's festive month sales.

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