Economy :– Monthly Dashboard: Economic activity picked up in Nov`24 by Motilal Oswal Financial Services Ltd
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Expect real GDP growth at 5.5%-5.7% in 3QFY25
*Preliminary estimates indicate that India's EAI-GVA growth accelerated to a five-month high of 6.2% YoY in Nov’24 vs. 5.7%/6.7% in Oct’24/Nov’23. The acceleration was primarily led by six-month high growth in the industrial sector and resilient services sector growth.
*EAI-GDP, however, declined for the first time in 28 months by 0.8% YoY in Nov’24 vs. a growth of 9.3%/3.0% YoY in Oct’24/ Nov’23, mainly due to a contraction in external trade, which subtracted 6.3pp from EAI-GDP growth in Nov’24, as imports grew faster than exports. Total consumption growth decelerated to 5.4% in Nov’24 vs. 8.3% in Oct’24, while investment growth picked up to a six-month high of 5.2% YoY in Nov’24. Excluding fiscal spending, EAI-GDP contracted 1.7% YoY in Nov’24, the lowest in 36 months.
*Selected high-frequency indicators (HFIs) portray a mixed picture for economic activity in Dec'24. CV sales picked up to an eight-month high in Dec'24, PV sales grew at a 25-month highest rate and PMIs remained resilient. At the same time, toll collection growth decelerated, vaahan registrations growth was the worst in 46 months, and power generation growth picked up but was still subdued.
*After surprising positively in each of the four quarters of FY24, real GDP growth plunged shockingly to a seven-quarter low of 5.4% in 2QFY25. Our in-house models suggest that economic growth improved slightly in Oct-Nov’24, compared to 2QFY25. At the same time, HFIs portray a mixed picture for Dec'24. Accordingly, we believe that India’s real GDP growth could improve to 5.5%-5.7% YoY in 3QFY25 vs. 5.4% in 2QFY25, much lower than the RBI’s forecast of 6.8%.
*EAI-GVA growth at five-month high in Nov’24: Preliminary estimates indicate that India's EAI-GVA growth accelerated to a five-month high of 6.2% YoY in Nov’24 vs. 5.7%/6.7% in Oct’24/Nov’23. The acceleration was primarily led by six-month high growth in the industrial sector and resilient services sector growth. (Exhibits 1 and 2)
*EAI-GDP growth at 28-month low in Nov’24: EAI-GDP, however, declined for the first time in 28 months by 0.8% YoY in Nov’24 vs. a growth of 9.3%/3.0% YoY in Oct’24/ Nov’23, mainly due to a contraction in external trade, which subtracted 6.3pp from EAI-GDP growth. Total consumption growth decelerated to 5.4% in Nov’24 vs. 8.3% in Oct’24, while investment growth picked up to a sixmonth high of 5.2% YoY in Nov’24. Excluding fiscal spending, EAI-GDP contracted 1.7% YoY in Nov’24, the lowest in 36 months. (Exhibits 3 and 4)
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