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Economy Watch
Economy Watch provides an in-depth review of salient developments in India’s macroeconomy and economic policy in a global context.
It has established itself as a thought leadership publication, providing valuable inputs for policymakers in the central and state governments, academicians, industry and businesses and other stakeholders.
Economy Watch was launched for public distribution soon after demonetization. Since then more than 90 issues have been published.
It covers various macro-fiscal dimensions of the Indian economy including growth, inflation, government finances, external trade, monetary and financial sectors. It places India in a comparative economic framework using selected developed and developing countries.
Two innovative indices have been developed to capture changes in aggregate demand and macroeconomic imbalances in the Indian economy. The analysis in the Economy Watch is based on monthly, quarterly and annual data sourced from national and international sources.
Every month, a focused theme of contemporary economic importance is identified for a deep and insightful analysis which provides useful inputs and recommendations.
Key highlights for October 2024
- In September 2024, both manufacturing and services PMI pointed to easing growth momentum as they fell to 56.5 and 57.7 from their corresponding levels of 57.5 and 60.9 respectively in August 2024.
- IIP contracted by (-)0.1% in August 2024 largely owing to unfavorable base effect.
- CPI inflation increased to a nine-month high of 5.5% in September 2024, whereas core CPI inflation remained benign at 3.5%, although increasing from 3.3% in August 2024.
- WPI inflation remained low at 1.8% in September 2024, although higher as compared to 1.3% in August 2024, attributable mainly to a surge in vegetables inflation led by waning of favourable base effects.
- As per the CGA, GoI’s GTR showed a growth of 12.1% during April-August FY25 with growth in direct taxes at 12.9% and that in indirect taxes at 9.5%.
- GoI’s total expenditure showed a contraction of (-)1.2% during April-August FY25, with revenue expenditure growing by 4.1% and capital expenditure contracting by (-)19.5%.
- GoI’s fiscal and revenue deficits during April-August FY25 stood at their unprecedented low levels of 27.0% and 24.7% of their respective annual BE.
- The RBI retained the repo rate at 6.5% for the 10th successive time in its monetary policy review held on 9 October 2024.
- Gross bank credit grew by 15.0% in August 2024, close to its level of 15.1% in July 2024.
- Current account posted a deficit of (-)1.1% of GDP in 1QFY25 after showing a surplus of 0.5% in 4QFY24 due to widening of net merchandise trade deficit.
- Growth in merchandise exports turned positive at 0.5% in September 2024 from a contraction of (-)9.3% in August 2024 while that in imports eased to 1.6% from 3.3% over the same period.
- Merchandise trade deficit narrowed to US$20.8 billion in September 2024 from US$29.6 billion in August 2024 led by positive growth in exports.
- After witnessing outflows for two successive months, net FDIs turned positive with inflows amounting to US$1.8 billion in August 2024.
- Average global crude price fell to its lowest level since August 2021 to US$72.4/bbl. in September 2024.
- The OECD Economic Outlook (Interim report) released in September 2024 projected global growth to remain stable at 3.2% in 2024 and 2025 with India’s FY25 and FY26 growth forecasted at 6.7% and 6.8% respectively.
- The recently released October 2024 issue of IMF’s WEO projects India real GDP to grow by 7.0% in 2024 (FY25).
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