INSUBCONTINENT EXCLUSIVE:
Exports grew by a relatively strong 14.3 percent in July from a year earlier.India's economy is shrugging off global trade wars, relying
on domestic consumption to stay on course to becoming the fastest-growing major economy this year.Demand for bank loans remained solid going
into the July quarter despite rising interest rates, and so was the case with services and manufactured goods, a cross-section of
forward-looking indicators compiled by Bloomberg News show ahead of government data on economic growth due Aug
Foreign investments slowed, highlighting risks to India's balance of payments position.Other risks loom in the form of higher oil prices,
tightening global financial conditions and a shortfall in taxes that can put budget targets out of reach
For now, the economy is showing steady expansion, with the International Monetary Fund forecasting growth of 7.3 percent in the fiscal year
through March 2019 and 7.5 percent in the next as reforms initiated by Prime Minister Narendra Modi pay off.Here are the full details of the
dashboard:Business ActivityIndia's main services index rose at the fastest pace in 21 months in July, the latest purchasing managers
survey showed, while manufacturing continued to expand, but at a slower pace
These together pushed the composite index to its highest level since October 2016
The optimism stems from a rise in new orders, giving confidence to businesses to produce more.On the price front though there are were mixed
Services providers were unable to fully pass on rising costs, while manufacturers increased output charges for the 12th straight month.Data
from the central bank also showed an uptick in capacity utilization to above 75 percent
That gain usually drives inflationary pressures and indicates improved pricing power, which eventually provides more incentive to
invest.ExportsExports grew by a relatively strong 14.3 percent in July from a year earlier, although slower than the 18 percent pace in the
Economists and policy makers are optimistic that the recent weakness in the rupee will help support the recovery in sectors such as
than a year ago, with the increase led by commercial vehicles and two-wheelers
Total sales were up 8 percent in the latest indicator, underpinning a view that domestic demand is holding up well.With more consumption
comes more demand for loans
Bank credit rose 12.7 percent in August from a year ago, with most of the loans being made to the services sector
Bloomberg Economics' Abhishek Gupta attributed the rise in bank credit over the past year largely due to favorable base effects
Rising borrowing costs have instead crimped corporate bond issuances, indicating that total credit flowing to the corporate sector is weak,
he said.The Citi India Financial Conditions Index shows a tightening in markets amid back-to-back interest rate hikes by the Reserve Bank of
The index incorporates among other indicators, short-term money market rates, government bond yields (short and long tenor), the yield
curve, credit and credit default spreads.Economic ActivityForeign direct investments fell to their lowest since January, and that could
weigh on India's balance of payments
Already, the current account deficit is expected to widen due to higher oil prices and slowing inflows into the capital markets
With a general election due in early 2019, concerns about policy paralysis and whether Modi will manage to repeat his 2014 landslide-win may
40 percent to the industrial production index -- lend hope
The 6.7 percent pace of expansion in June from a year earlier was the strongest in seven months.(Except for the headline, this story has not
been edited by TheIndianSubcontinent staff and is published from a syndicated feed.)
