MOSL: ECOSCOPE-Economic activity growth in April 2017 at 5-month high-Government consumption provides a big boost amid weak private spending
​ECOSCOPE: Economic activity growth in April 2017 at 5-month high; Government consumption provides a big boost amid weak private spending
- India’s monthly economic activity index (EAI) grew 4.1% YoY in April 2017, marking its highest growth in the past five months, but still lower than in the pre-demonetization period.
- Further details show that consumption activities grew strongly at 9.6% YoY in April 2017, primarily supported by ~55% YoY growth in government consumption. Investments, on the other hand, grew mildly at 1.2%, due to lower contraction in construction activities.
- Although there is no one-to-one correlation due to inherent differences, our EAI tends to move in sync with official GDP (excluding discrepancies). With private sector remaining weak and fiscal policy likely reaching limits, we would be very carefully looking at how long the government can support economic activity.
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