Jeffries Reports a Surge in India's Economic Growth Following Q2 Slowdown
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New Delhi, Dec 18 (NationPress) The resurgence of India's economic growth following the slowdown in the July-September quarter is apparent, with movement indicators such as fuel consumption, vehicle tolls, and air traffic showing a notable uptick, according to a report from Jefferies released on Wednesday.
The Jefferies economy tracker composite indicator reflects a continued growth momentum, with a 6.4 percent year-on-year increase in November, marking the second-fastest growth rate in the past 13 months.
“The festive season caused month-on-month fluctuations due to the timing of Diwali,” the report noted.
When considering combined activity growth for October and November, the 6.5 percent increase represents a significant enhancement over previous months, achieving the most rapid growth in five quarters, as indicated by the Jefferies report. “We anticipate that the revival in government capital expenditure and the increase in liquidity due to relaxed RBI policies will bolster GDP growth in the upcoming quarters,” the brokerage stated.
Most broad-based indicators showed improvement, particularly in November, where a significant rise in diesel consumption was recorded, marking the highest increase in 13 months compared to the previous year.
“We believe monetary tightening is behind us,” Jefferies analysts expressed in the note. The Reserve Bank of India's approach to liquidity has also been favorable, with overnight liquidity remaining in surplus for the last three months. We expect monetary conditions to continue to ease into early 2025,” Jefferies added.
Finance Minister Nirmala Sitharaman also addressed Parliament on Tuesday, stating that the lower-than-expected GDP growth in the second quarter of the current fiscal year is merely a “temporary blip,” and economic growth is expected to recover in the upcoming months.
The finance minister emphasized that India has consistently recorded steady growth, with an average GDP growth rate of 8.3 percent over the last three years, maintaining its status as the fastest-growing major economy.
“With a 5.4 percent GDP growth rate, Q2 fell short of expectations. This quarter has proven challenging for India and many other global economies,” she remarked.
She further clarified that there is no widespread slowdown within the manufacturing sector. “A generalized slowdown in manufacturing is not anticipated, as it remains confined to a few segments. Among the 23 manufacturing sectors listed in the Index of Industrial Production, approximately half continue to show robust performance,” the Finance Minister elaborated.
