What's the article about?
- It talks about the key findings of recently released economic indicators and its implications for Indian Economy.
Relevance:
- GS3: Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment
Context:
- Latest data, including the official Index of Eight Core Industries for September and S&P Global’s Purchasing Managers’ Index (PMI) for the manufacturing sector for October, point to a palpable softening in economic momentum.
Analysis:
- Core Industries Growth Eases:
- Eight Core Industries' growth slows to four-month low of 8.1% in September
- Coal output remains robust with year-on-year growth of 16.1%
- Heavy rains likely dampened demand and output for cement, electricity, and steel
- Manufacturing PMI Signals Weakening Demand:
- S&P Global India Manufacturing PMI slides to eight-month low in October
- New orders growth at slowest pace in a year
- Job creation in manufacturing at slowest level since April
- Input cost inflation accelerates, but factory gate inflation slows
- Business Confidence Ebbs:
- Business confidence drops to five-month low
- Rising inflation expectations cited as key factor expected to dent demand and production growth
- Advance estimates for lower kharif output indicate challenges for the farm sector
- Policymakers Face Twin Challenges:
- Policymakers need to address slowing growth and persistent inflation
- Measures to boost demand and ease supply-side constraints are crucial
- Maintaining fiscal discipline while supporting growth is essential
Way Forward:
- In summary, the latest economic data from India points to a slowdown in momentum. Core industries growth has eased, the manufacturing PMI signals weakening demand, and business confidence is ebbing. Policymakers face the twin challenges of slowing growth and persistent inflation. Measures to boost demand, ease supply-side constraints, and maintain fiscal discipline are essential to revive economic growth.
