Unpacking the State of the Economy: Key Insights and Trends Revealed in Latest Podcast!
The latest episode of the State of the Economy podcast delves into the current economic landscape of India, shedding light on various high-frequency economic indicators and their implications on the macro economy. Hosted by businessline’s Shishir Sinha and featuring Economist Achala Jethmalani from RBL Bank, the conversation covers a wide range of key areas that are crucial in understanding the state of the Indian economy.
One of the key points discussed in the podcast is the growth rate of GST collections, which has slowed to 7.7 per cent. Despite the slowdown, the absolute numbers remain strong at 1.7 lakh crore. Jethmalani attributes this deceleration to a possible slowdown in election-related activities. On a positive note, the PMI manufacturing index shows promising signs with a reading close to 60. India leads the pack among 10-12 countries, indicating a positive outlook for the manufacturing sector in the coming months.
However, the employment indicators present a mixed picture. While the MNREGA employment numbers have dropped significantly, the CMIE unemployment rate has increased to 9.2 per cent. Jethmalani highlights the challenge of distinguishing between seasonal and permanent employment to get a clear understanding of the employment trend in the country.
Producer inflation has been on the rise due to increasing input costs, which have been passed on to consumers, leading to a spike in the wholesale price index. This inflationary pressure is driven by global commodity price spikes, but Jethmalani believes it could be a temporary phenomenon if China’s economic slowdown persists. On the fiscal front, the fiscal deficit for the first two months has reduced to 3 per cent of the budget estimate, marking a monthly surplus for the first time in 22 months. This is attributed to robust tax collections and reduced spending during the election phase.
Retail inflation, especially food inflation, remains a concern, with the retail inflation number for June expected to be similar to May’s 4.75 per cent. Jethmalani predicts that inflation will hover around 4.6 per cent in June, with core inflation showing a slight reduction but not reaching the medium-term target of 4 per cent until at least September.
Overall, the podcast provides a comprehensive overview of the current economic scenario in India, highlighting both the positive and challenging aspects across various sectors. The insights shared by Jethmalani offer valuable perspectives on the trends shaping the Indian economy and provide a roadmap for understanding the future trajectory of economic growth in the country.
The State of the Economy podcast serves as a valuable resource for listeners looking to stay informed about the latest economic trends and developments in India. With experts from diverse fields offering their insights, the podcast aims to provide a holistic view of the Indian economy and help listeners navigate the complexities of the economic landscape.