Economic Digest

Economic Digest

Sunday, December 01 2019

The RBI may have hit pause on monetary easing for fears of inflation, but the issue of delayed and inadequate transmission of the rate cuts into the credit market also needs greater attention The macro-economic slowdown has manifested in the 25-quarter low GDP growth of 4.5% in July-September 2019; the 4.3% growth in gross value added (GVA) in Q2 of 2019-20, vis-à-vis 4.9% in Q1 and 6.9% in Q2 last year; and the slow exports and contraction across sectors, including a weak service sector. Manufacturing sector’s contraction by 1% in Q2 (6.9% last year) — on top of an almost flat Q1, 68.9% industry capacity utilisation in July-September (73.6% in April-June) — and the contraction in output in eight core industries in October, for the second consecutive month, cause concern. In H1, the manufacturing sector contracted by 0.2% as against 9.4% last year.

The RBI may have hit pause on monetary easing for fears of inflation, but the issue of delayed and inadequate transmission of the rate cuts into the credit market also needs greater attention The macro-economic slowdown has manifested in the 25-quarter low GDP growth of 4.5% in July-September 2019; the 4.3% growth in gross value added (GVA) in Q2 of 2019-20, vis-à-vis 4.9% in Q1 and 6.9% in Q2 last year; and the slow exports and contraction across sectors, including a weak service sector. Manufacturing sector’s contraction by 1% in Q2 (6.9% last year) — on top of an almost flat Q1, 68.9% industry capacity utilisation in July-September (73.6% in April-June) — and the contraction in output in eight core industries in October, for the second consecutive month, cause concern. In H1, the manufacturing sector contracted by 0.2% as against 9.4% last year.

The RBI may have hit pause on monetary easing for fears of inflation, but the issue of delayed and inadequate transmission of the rate cuts into the credit market also needs greater attention The macro-economic slowdown has manifested in the 25-quarter low GDP growth of 4.5% in July-September 2019; the 4.3% growth in gross value added (GVA) in Q2 of 2019-20, vis-à-vis 4.9% in Q1 and 6.9% in Q2 last year; and the slow exports and contraction across sectors, including a weak service sector. Manufacturing sector’s contraction by 1% in Q2 (6.9% last year) — on top of an almost flat Q1, 68.9% industry capacity utilisation in July-September (73.6% in April-June) — and the contraction in output in eight core industries in October, for the second consecutive month, cause concern. In H1, the manufacturing sector contracted by 0.2% as against 9.4% last year.

The RBI may have hit pause on monetary easing for fears of inflation, but the issue of delayed and inadequate transmission of the rate cuts into the credit market also needs greater attention The macro-economic slowdown has manifested in the 25-quarter low GDP growth of 4.5% in July-September 2019; the 4.3% growth in gross value added (GVA) in Q2 of 2019-20, vis-à-vis 4.9% in Q1 and 6.9% in Q2 last year; and the slow exports and contraction across sectors, including a weak service sector. Manufacturing sector’s contraction by 1% in Q2 (6.9% last year) — on top of an almost flat Q1, 68.9% industry capacity utilisation in July-September (73.6% in April-June) — and the contraction in output in eight core industries in October, for the second consecutive month, cause concern. In H1, the manufacturing sector contracted by 0.2% as against 9.4% last year.

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