Economy stable in Nov as retail demand rises
NEW DELHI: India’s economic activity showed signs of stabilising in November, even as concerns of fresh virus outbreaks and a new strain in the UK mount amid news of vaccines fuelling hope.
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News were steady last month, keeping the needle on a dial measuring the so-called ‘Animal Spirits’ unchanged at 5. The level was arrived at by using the three-month weighted average to smooth out volatility in the single-month readings.
The pace of activity thus far was enough for RBI to revise its forecast for the economy, which it now expects to exit a recession in the current quarter to December. Activity in India’s dominant services sector expanded for a second straight month in November, although at a slower pace. The Markit India Services Purchasing Managers’ Index was at 53.7 last month versus 54.1 in October, with a reading above 50 indicating expansion.
Manufacturing activity lost some of the momentum seen in the past few months, and as a result caused the composite index to drop to 56.3 in November from 58 a month earlier.
Exports lost some momentum last month, declining 8.7% in November from a year ago as trading partners were hit with fresh restrictions amid a second wave of Covid-19 infections. Imports were weak, with demand for capital goods still subdued and remains a possible cause for worry.
Passenger vehicle sales, a key indicator of demand, rose 4.7% in November from a year ago, although the pace was slower than what was seen in the run up to Diwali.
Demand for loans picked up from lows seen in October. Industrial production rose 3.6% in October from a year earlier.