Going with the 15 non-financial high frequency indicators tracked by ICRA Ratings, nine have recorded growth in September 2020. On the other hand, five showed a narrower year-on-year contraction.
Aditi Nayar, principal economist, ICRA, said, “The recovery in GST e-way bills, electricity, petrol and diesel in September 2020 provides a meaningful signal of a broader economic revival. The improvement in some of the other indicators, such as auto output, reflects a combination of pent-up demand, healthy rural sentiment, and inventory build-up, ahead of the upcoming festive season.”
She further added that the trend may persist in the coming 1-2 months, before settling at more sedate levels after the festive season is over. Sharp favourable base effects have contributed to the high performance of some outliers, such as the output of Coal India Limited (CIL) which are likely to be unsustainable.
Data shows that electricity generation turned around to a growth of 4.2 per cent in September 2020 from the 3.3 per cent YoY decline in August 2020, reflecting a broader economic recovery as well as a favourable base. Likewise, aggregate auto production recorded an expansion of 11.7 per cent in September 2020, after having displayed sustained YoY contraction for the previous 22 months.
The output of Coal India also rose by 31.6 per cent YoY in September.
“The offtake levels did improve modestly in September 2020, the high growth in output is an outlier, which largely reflects the favourable base effect related to the deep contraction in September 2019, with output having been curtailed by excessive rainfall in that month,” ICRA said in a release.
Monthly indicators tracked by ICRA include the production of passenger vehicles, motorcycles, scooters, vehicle registrations, the output of Coal India Limited, thermal and hydroelectricity generation, non-oil merchandise exports, ports cargo traffic, rail freight traffic, generation of GST e-way bills, domestic airlines passenger traffic, consumption of ATF, petrol and diesel, aggregate deposits and non-food credit of scheduled commercial banks.