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Macro indicators show economy on a rebound trajectory but July witnesses speed bumps

Macro indicators show economy on a rebound trajectory but July witnesses speed bumps

Macro indicators show economy on a rebound trajectory but July witnesses speed bumps
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By Ankit Gohel  Jul 23, 2020 2:19:01 PM IST (Published)

As the country gradually looks returning to normalcy, from the pandemic induced lockdown, and the business activity picking up, the economy seems to gather pace. At least, the indicators are pointing to improvement. The data made available post partial reopening are suggesting affirmations.

As the country gradually looks returning to normalcy, from the pandemic induced lockdown, and the business activity picking up, the economy seems to be shifting gears. At least, the indicators are pointing at improvement. The data made available post partial reopening are affirming this.

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According to data compiled by Phillip Capital, June energy consumption was highest since February, picked up further in July, mid-July data shows a slight slack. June E-way bills were higher than March while July seems stable.
Further, the Google mobility index has flattened post the first week of June. India's unemployment rate is at pre-COVID levels, rural unemployment at near lows, though the latest data is marginally weak. Substantial surplus liquidity persists in the system.
Energy Consumption  
Energy consumption for June 2020 was at -12.2 percent, when compared to the same period last year. Sequentially, it saw a marginal increase of 2.4 percent in June compared to 21.2 percent in May. Consumption in April was at -15.3 percent due to the lockdown.
Daily consumption up to July 20, shows a contraction by an average -4 percent compared annually.
E-way Bills
E-way bill generation recovered in June to -13 percent YoY compared to -53 percent in May and -84 percent in April. Due to the lockdown announced in the second half of March, E-way bill generation declined by -29 percent MoM in the month. It further declined by -79 percent in April.
Google Mobility Index
Google mobility report depicts the economic activity based on the location of users. According to the data,  mobility to grocery/pharma places had bounced back to pre-COVID levels in June while July data indicates a slight decline. Mobility to the workplace is around 30 percent less than normal and has flattened after the first week of June, the Phillip Capital report noted.
Further, mobility to transit stations/public transport is tapering in July (41 percent below normal. Also, mobility to retail stores is 60 percent below normal.
Monetary Indicators
Currency in circulation growth improved by an average of 19.6 percent YoY in June versus 17.2 percent in May. Money supply growth improved by an average 12.4 percent in June versus  11.6 percent in May.
Annual credit growth rate was at 6.1 percent in June as against 6.4 percent in May, the report added.
Unemployment
As per the Centre for Monitoring Indian Economy (CMIE) data, unemployment rates dipped to 10.99 percent in June compared to 23 percent in April and May.
There was further improvement in July. The rate as on July 19 was marginally higher at 7.94 percent compared to 7.44 percent on July 12. This was led by an increase in rural unemployment rate, the report noted.
Food Stock - Focusing on Garib Kalyan Yojana
Food grain stocks were higher at 104.2 million tonnes (20.9 percent YoY) in June 2020 compared to the same period a year ago. Food stocks in May were up by 16 percent.
Monsoon and Kharif sowing
Monsoon rainfall was 6 percent above normal. Above normal rainfall seen in east / central / south India at 13 percent /8 percent / 18 percent, while the northwest saw a deficit of 19 percent. Kharif sowing annual growth was 21.20 percent.
Annual sowing growth: rice: 18.59 percent; pulses: 32.35 percent; coarse cereals: 12.23 percent; oilseeds: 40.75 percent, and cotton: 17.28 percent.
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