55% Of Indian Economy To Grow Positively Amid Signs Of Moderation: HSBC Report

The Indian economy continues to grow positively, with 55% of its indicators showing an upward trend, according to an HSBC Global Research report. This marks a decline from 65% in the previous quarter, reflecting a moderation in economic activity after rapid stock market gains and strong GDP growth.

The report highlights that despite the slowdown, several sectors are performing well, and long-term prospects remain promising.

Agriculture and Investments Lead Growth in Economy

Agriculture, contributing 15% to the GDP, shows improvement with 60% of its indicators in positive territory. Favorable weather conditions and well-filled reservoirs have boosted production, despite earlier disruptions from irregular rains and heatwaves.

Government expenditure on capital and infrastructure projects is driving investments, particularly in construction. Credit expansion to small and medium enterprises is robust, supported by digital public infrastructure, enhancing accessibility.

Consumption and Exports Show Mixed Trends

Consumption in rural and urban areas has slowed, with a dip in manufacturing output related to consumer goods. The Reserve Bank of India’s measures to curb excessive personal loan growth have also impacted consumer finance.

However, export diversification, particularly in professional services, is sustaining export growth. Tourism-related activities are thriving, fueled by pent-up demand, while the communication sector has stalled due to earlier tariff hikes.

The report notes that overall GDP growth is stabilizing at around 6.5%, down from the earlier 7%+ levels. It emphasizes that this more sustainable pace, combined with improvements in agriculture, could lead to a more equitable distribution of growth.

Also Read: Inflation To Ease, Economic Growth To Accelerate In Coming Months: Finance Ministry