On Monday, 27th November 2023, data was shared which noted that domestic urban consumption increased to a 3-month high in September 2023 which was increased by moderating price pressures, a lift in Southwest monsoon performance along the beginning of the festive season. It is not the first time the data has shown the acceleration as in March or the first quarter, the urban consumption of India hit a 3.5-year high. After that, the report of Business Standard already states that the urban consumption of India would surely propel the GDP growth of India.
According to the previous report of BS (Business Standard), the economy of India is likely to post higher than the anticipated growth in July-September and now the latest data has proved it. As per the TRUC index prepared by QuantEco Research (an economic advisory firm), “India’s urban consumption index boosted to a three-month of 0.66 that reported in the second quarter. Earlier, the urban consumption was reported at 0.62 in August 2023. However, we still need to wait as this consumption remains below the recent peak of 0.70 as of May 2023.” The economic advisory firm states that the urban recovery was directly by the sales of strong passenger vehicles as well as air passenger traffic. The moderation in retail urban inflation is also responsible for the acceleration of growth.
Not only urban consumption but rural consumption has also been reported on a higher side and the improvement is clearly visible. The index shows that rural consumption increased by 0.65 in the month of September 2023 as earlier in August 2023 it was reported at 0.57. This growth is led by different factors that include the sales of a seasonal pick-up in the tractor, and pre-festive season directed by buoyancy in 2-wheeler sales. Only these factors are not responsible for the growth, the other factor is a correction in CPI rural inflation.” QuantEco Research introduced the index to account for consumption both in rural as well as in urban areas and the aim of this index is to fill an important data gap that is helpful for businesses to provide a clear picture of the consumption pattern in India.
As we mentioned above, numerous data points such as air traffic, passenger car sales, and other consumer trends had indicated a lift in consumption, which has reduced speed as inflation surged and interest rates tightened. Besides, the new data presented retail inflation which reduced the speed to a 4-month low in the month of October as prices of fuel and some food items were lessened, sliding a shade below the five per cent mark and providing much-required relief from mulish price pressures. Besides it, the triggering hopes of a possible interest rate cut in 2024. Apart from this, the report also states that with the festival Diwali late this year, the festive season’s demand is likely to remain intact in the month of October 2023. To know more such news, be connected with Businessview magazine and we will back you with more information.