Global growth projections diverge across regions
The US economy grew at an annual rate of 2.1% in Q22023, from 2% in Q1, while Germany’s economy stagnated in Q2, after contracting by 0.1% y-o-y in Q12023.
Indian economy grew by 7.8% in Q1FY24
The GDP growth rate accelerated to 7.8% y-o-y in Q1FY24, with improved momentum in manufacturing, progress in construction activities, and an upbeat services sector.
High-frequency indicators continued to show resilient growth
The manufacturing purchasing managers’ index (PMI) rose to a 3-month high in August to 58.9, and services PMI stood at 60.1. The index of industrial production (IIP) expanded by 5.65% (y-o-y) in July, and production in eight core industries expanded by 8% in August.
CPI inflation softened to 6.83% in August from 7.44% in July
The August CPI inflation has softened from its July levels on the back of a slight fall in food and core inflation but remained above RBI’s threshold band of 6% for the second consecutive month.
Crude oil price surges close to November 2022 levels
The average crude oil price of the Indian basket crossed USD86 per barrel in August, driven by rising demand and tightened supplies due to the extension of production cuts by Saudi Arabia and Russia.
- India’s economic activity remained resilient in August as indicated by both the manufacturing and services purchasing managers’ index (PMI) - which remained comfortably above 50, signalling continued economic expansion.
- Inflation came in at 6.83% in August 2023, remaining above the RBI’s target range of 4-6% mainly due to high food prices.
Note: Data is Provisional
Source: CMIE Economic Outlook, 1 Finance Research
So, what does all of this mean for your finances?
Well, India is expected to be one of the world's fastest-growing economies, which is likely to lead to continued job creation and rising income levels. One significant advantage for India is its substantial and rapidly expanding middle class, which plays a crucial role in propelling consumer spending. This growing demographic is expected to sustain India's position as one of the world's most rapidly growing economies.
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