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Merisis Wealth Monthly Outlook - September 2024 📊

 

📅 September 2024 update:

In the complex landscape of India’s economy for July and August 2024, key indicators reveal both promising trends and emerging challenges. While inflation rates have significantly dropped, reflecting effective monetary policies, the slowing growth in industrial production and GDP raises concerns about sustained economic momentum. The notable increase in deposit growth indicates a cautious consumer sentiment amidst fluctuating export performance and widening trade deficits. As the financial environment evolves, the ability to balance growth with stability will be critical for policymakers and investors alike.

 

In July and August 2024, India’s economic landscape showcased mixed signals: inflation rates declined, with the Consumer Price Index falling to 3.54% and Wholesale Price Index to 2.04%, reflecting easing price pressures. However, industrial production growth slowed to 4.20%, and GDP growth dipped to 6.70%, indicating potential economic cooling. While credit growth remained stable at 13.60%, deposit growth increased to 10.90%, suggesting heightened consumer savings. On the trade front, exports fell by 1.48%, contrasting with a surge in imports at 7.46%, which contributed to a widening trade deficit of $23.50 billion. Despite these challenges, strong institutional equity inflows highlighted ongoing investor confidence in the market. Balancing these dynamics will be crucial for maintaining economic stability moving forward.

Key Highlights:

Summary of Key Economic Indicators (July-August 2024)

  1. CPI Decline 📉: Consumer Price Index inflation fell to 3.54% in July, down from 5.08%, signaling easing price pressures.

  2. WPI Eases 🛒: Wholesale Price Index inflation dropped to 2.04%, down from 3.36%, reflecting reduced costs in various sectors.

  3. IIP Growth Slows 🏭: Industrial production growth eased to 4.20% in June, down from 6.20% in May, indicating potential slowdown in manufacturing.

  4. GDP Growth Dips 📊: The economy grew by 6.70% YoY in Q1FY25, a decrease from 7.80% in the previous quarter, highlighting slowing economic momentum.

  5. Stable Credit Growth 💳: Credit growth stood at 13.60%, slightly down from 13.70%, indicating consistent borrowing patterns.

  6. Deposit Growth Up 💰: Deposit growth rose to 10.90%, up from 10.60%, suggesting increased savings behavior among consumers.

  7. Exports Decline 📉: Year-on-year export growth fell to -1.48%, contrasting with a previous increase of 2.56%, reflecting challenges in global demand.

  8. Import Growth Surges 📦: Import growth increased to 7.46%, up from 4.99%, driven by rising demand for goods, impacting the trade balance.

  9. Trade Deficit Widening 📉: The trade deficit reached $23.50 billion in July, worsening from $20.98 billion, highlighting trade imbalances.

  10. Favorable Equity Flows 📈: Institutional flows showed strong net inflows in equity markets, with Foreign Institutional Investors (FIIs) contributing ₹7,320 crore in the latest month. 

Authors

  • Naresh Bulchandani, CFA, CAIA

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