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MOSL: ECOSCOPE | EAI growth subdued in Apr’19-Expect GDP growth at ~6% in 1QFY20

ECOSCOPE | EAI growth subdued in Apr’19; Expect GDP growth at ~6% in 1QFY20

 

• Our in-house Economic Activity Index (EAI) for India's real GDP (called EAI-GDP) indicates growth of 4.5% YoY in Apr'19, much better than 0.8% in Mar'19 but weaker than 7.2% in the year-ago period. Acceleration in EAI-GDP was driven by the return of normalcy in fiscal spending, due to which consumption activity grew 7.4% YoY in the month. Investments, on the other hand, remained weak, exhibiting a downtrend for the second time in the last three months on account of a continued (expected) decline in IIP for capital goods and subdued construction activity. External trade also impacted EAI-GDP growth in Apr'19, after adding for three successive months.
• EAI-GVA index also picked up from 25-month lowest growth of 4.5% in Mar'19 to 6.5% in Apr'19, but remained weaker than 7.2% in Apr'18. While industrial activity growth remained intact, the weakness in farm activity was more than offset by the revival in the services sector.