Missing demand: on economic slowdown

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By Moderator 1 May 15, 2019 13:03

News

Society of Indian Automobile Manufacturers (SIAM) has reported the decline of almost 16% in total automobile industry sales in April, from a year earlier

Significance of decline

  • The decline in demand is an indication that consumer demand across markets – urban and rural, institutional and individual – is contracting

Another indicator of a slowdown

  • The Index of Industrial Production (IIP) for March shows output fell 0.1% from a year earlier to a 21-month low
  • The capital goods sector shrank by 8.7% on the back of an 8.9% contraction in the preceding month.
  • The output of consumer durables fell 5.1% from a year earlier, and growth in consumer non-durables production slid to 0.3% from the 14.1% pace in March 2018.
  • Overall Manufacturing the sector’s growth slowed to 3.5% in the last fiscal, from 4.6% in 2017-18.

Factors which may enhance slowdown in the near future

  • The trade war between US and China
  • Rising tensions in West Asia which may push up energy costs from the top oil-exporting region
  • The distress in the farm sector if the monsoon does turn out to be “near normal”

Source

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Moderator 1
By Moderator 1 May 15, 2019 13:03