Indian economy’s performance worsens in August: Mint tracker

Seven indicators were below their five-year average trends in August, as against three in July. The number of indicators above their five-year trend, however, remained the same at seven, signalling some strong areas in the economy.

The Mint macro tracker, which provides a monthly comprehensive report on the state of the economy, is based on trends in 16 high-frequency indicators. The tracker has been running since October 2018.

For each indicator, the value in each month is assigned a colour coding (red, amber and green) to denote where it lies relative to the five-year average (red denotes worse, amber denotes it is in line with the average range, and green denotes better).

In August, all four indicators for the consumer segment—passenger vehicle sales, tractor sales, broadband subscriber base, and domestic air passengers—were in the red. From the producer economy, rail freight traffic disappointed, and from the external sector, wider trade balance and labour-intensive export growth flashed weakness.

The composite Purchasing Managers’ Index (PMI), core sector growth, non-food credit, inflation, real wages, and labour force participation rate remained resilient.

While the consumer economy continues to struggle, hopes are hinged on the festival season to give a much-needed fillip to the segment.

Methodology note: While calculating the five-year average, data for some indicators for April-May 2020 and April-May 2021 were removed to eliminate lockdown-induced skews in the trend. However, the five-year averages may still show high figures due to sustained base effect in several indicators in 2021 and 2022.

Monthly standings will get updated retrospectively as more data comes in.

For inflation, the red/green coding is reversed.