As 10 out of the 15 constituent indicators witnessed an improvement in their Year-on-Year (YoY) growth performance, the YoY growth in economic activity rose to a five-month high of 10.7 per cent in July 2024 from 10 per cent in June 2024, as measured by the Icra Business Activity Monitor, an index of high-frequency indicators. The index witnessed a contraction of 0.9 per cent on a sequential basis in July 2024. However, the outlook for August 2024 points towards a slowdown, as per Icra.
The mobility-related indicators such as domestic airline passenger traffic, petrol and diesel consumption, Goods and Service Tax (GST) e-way bills along with the auto-related indicators including vehicle registration, motorcycle, scooter and passenger vehicle output reported an improvement in July 2024 as compared to June 2024.
However, the YoY growth in coal output slipped to a 28-month low of 2.4 per cent from 8.8 per cent. The YoY growth in electricity generation declined to a seven-month low of 6.4 per cent. Similar trends were witnessed in finished steel consumption as the YoY growth moderated to 14.6 per cent in July 2024 from 21.1 per cent in June 2024.
The agency noted that the sequential contraction in the index is narrower than that seen in July 2023. As the index contracted by 0.9 per cent in July 2024 on a month-on-month (MoM) basis, it remained on the brighter side as compared to a contraction of 1.6 per cent seen in July 2023.
Icra has noted that the trends for August 2024 appear muted as the average daily vehicle registrations remained 8 per cent lower from 1 to 27 August 2024 as compared to the same levels a year ago. The all-India electricity demand declined by 4.2 per cent YoY from 1 to 27 August due to the adverse base effect and instances of heavy rainfall across parts of the country.
