According to the first advanced estimates of Real GDP growth released on Tuesday, the economy is set to grow at the slowest pace since FY09, when the global financial crisis played out. However, certain indicators from November and December 2019 show that the economy may improve in the second half of FY20. The growth rate in the final months of last year, though still slow-paced, hints at a possible revival
Manufacturing sector
In December 2019, the Manufacturing Purchasing Managers Index (PMI), compiled by IHS Markit, which measures a combination of new orders, output and employment of 400 manufacturers, rose to 52.7, the highest in 10 months.
PMI rises
Services sector
In December 2019, the Services Business Activity Index (BAI)*, which measures changes in the volume of business activity of 400 service sector companies, rose to 53.3 from 52.7 in November, the second-highest rate of increase in output in over a year (after July).
Steady tax collections
GST collections, which had dipped to this financial year’s lowest in September 2019, recovered in the following months. December is the second straight month that GST collections crossed the ₹1 lakh crore mark
GST revival
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Core sector
As for the core sector growth figures, the output of the eight core sector industries contracted by 1.5% in November. This was the fourth continuous month of decline, but it was still an improvement from the contractions recorded in October (5.8%) & September (5.1%)
Slight improvement
Source: Office of the Economic Adviser.
