After gaining some incremental strength in the months of Mar-Apr'22, India's economic recovery appears to have lost some ground led by the deterioration of the geopolitical environment and increased inflationary pressures.
While Acuité Macroeconomic Performance index (AMEP index) stood at 127.0 in May-22- well above the pre-pandemic level, it has eased a tad from the Apr-22 print of 127.8. From growth perspective, the index has registered a marginal dip of -0.7% MoM from an increase of +0.8% in Apr-22, underscoring some weakness in private consumption on the back of higher inflationary concerns as well as in industrial output due to supply chain bottlenecks.
Says Suman Chowdhury, Chief Analytical Officer, Acuité Ratings & Research " Our AMEP index throws some interesting insights on economic activities during Apr-May'22 which leads us to conclude that while the global adverse factors and the inflation threat has slowed down the momentum of economic recovery in India, the impact is still not that significant. The index print in both April and May'22 has been higher than that of Mar'22 when there is a typical peak in year-end economic activities. 12 out of the 16 monthly indicators have shown a positive growth MoM with both rail passenger and rail freight traffic along with petrol consumption recording growth in high single digits. If crude oil prices moderate during the course of the current fiscal and there is no further surprise from Covid, we believe that growth over 7.0% will be fairly achievable given the recovery potential in the services sector."
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