India’s economic activity likely hit a nine-month high in February, despite rural demand remaining weak and unemployment rising, thanks to a sharp expansion in exports, imports and corporate bond issuances, as per a CareEdge Ratings barometer.
The CareEdge Economic Meter, a composite index covering 18 high-frequency economic indicators to track the state of the economy, suggested a 10.3% year-on-year uptick in activity levels.
14 of the tracked indicators witnessed an annual growth which supported the index, including credit growth which hit a three-month of 20.5% in February, power consumption (up 8.4%) and passenger vehicles and two-three wheeler sales, which rose 10.9% and 34.5%, respectively.
On the other hand, momentum in the Services sector slipped in February, while fuel consumption growth slowed to 5.7% from 8.3% in January. “Tractor sales, a proxy for rural demand, remained in contraction for the third consecutive month, dropping 25.7% in February,” the rating firm said in a note.
The unemployment rate is also a concern, as it rose to 8% last month from 6.8% in January. “Although the unemployment rate eased in urban areas, it increased in rural areas,” CareEdge said.
