YoY Growth In Economic Activity Up To 9.7% In April 2024 From Three Month Low In March: Icra

The year-on-year (YoY) growth in economic activity, as measured by the Icra business activity monitor - an Index of high-frequency indicators, accelerated to 9.7 per cent in April 2024 from a three-month low of 8.9 per cent in March 2024, driven by an uptick in half of the 16 indicators. 

In line with the seasonal trends of a deceleration in the momentum of activity in April over March, the Index dipped sequentially by 7.2 per cent in April 2024, albeit narrower than the levels seen in April 2023, partly supported by the later onset of the Navratri season in 2024 vis-à-vis 2023. 

The early trends for May 2024 are mixed, amid a YoY surge in electricity demand owing to the heatwave-led higher-than-usual temperatures, while the growth in average daily vehicle registrations has trended lower. The YoY growth in the Icra business activity monitor rose to 9.7 per cent in April 2024 after falling to a three-month low of 8.9 per cent in March 2024.

While there has been a mixed trend in the disaggregated data (eight of the 16 indicators showing YoY improvement while the other eight indicators have worsened), the acceleration in the YoY Index growth in April 2024 over March 2024 was mainly led by auto-related indicators (output of PVs and 2Ws, and vehicle registrations), petrol consumption (owing to increased movement during the General Elections) and electricity generation (amid rise in temperature levels). 

This was partially dragged down by the weak performance of non-oil exports, rail freight (owing to coal) and diesel sales, according to the Icra. In line with the seasonal trends of a deceleration in the momentum of activity in April after a typical ramp-up in March, the Index declined by 7.2 per cent in month-on-month (MoM) terms in April 2024. 

However, this is narrower than the MoM fall seen in April of 2023 (-7.9 per cent), partly supported by the late onset of the Navratri season in 2024 vis-à-vis 2023.

Icra report also added that bolstered by heatwave conditions and above normal temperatures in some regions, and a low base, the YoY expansion in all-India electricity demand improved to a robust 17.4 per cent from 1 to 15 May 2024, from 10.5 per cent in April 2024. While the daily average vehicle registrations of 59.9k units from 1 to 16 May 2024 rose by a marginal 0.8 per cent on a YoY basis, they have declined significantly in sequential terms.