• July 2020 solid fuel imports at 14.7 million Metric Tons (MMT)  continue to be significantly lower by 25%over  last year’s levels of 19.65 MMT but there has been a turnaround, snapping a 5 month declining trend in imports. As compared to June’s import levels of 11.30 MMT, July is 30% higher.
  • Imports have fallen to multi year lows. June 2020 imports are the lowest seen since Jan 2013
  • The economy picked up momentum in June after it started opening up post the lockdown but the upward momentum seems to have lost steam and the growth curve is plateauing before a full recovery has taken place.
  • High-frequency indicators like purchasing managers’ surveys and fuel sales show growth dipping in July, pointing to weak business activity. India’s manufacturing PMI contracted at a quicker pace in July than a month prior and was one of the worst globally. Bank credit shrank and tax collections too moderated during the month. The improvements in the jobs scene also tapered off, according to the Centre for Monitoring India Economy.
  • Any improvement in economic data that we may have seen recently is just a reflection of normalization following extreme lows; it is unlikely that India’s macroeconomic fundamentals have seen any such improvements, according to Prachi Mishra, chief India economist, Goldman Sachs.
  • Mishra adds that credit rating agencies appear concerned about India’s administrative and fiscal ability to implement large-scale support programs. While India could get a boost in 2021 due to policy support and pent-up demand in advanced economies, she is of the view that there is no domestic fundamental force to drive India’s GDP from here on.

This analysis has been compiled by obtaining data from Iman Resources’ sources.

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