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Monthly EconoEmiCc ROevieNw OMIC DIVISION October 2024
MONTHLY
ECONOMIC REVIEWMonthly Economic Review October 2024
Table of Contents
Abstract ..................................................................................................................................... 3
Underwhelming global growth ............................................................................................... 4
Global disinflation underway ................................................................................................. 6
Amidst renewed risks to global growth, India’s indicators improve in October ............... 8
Robust food grain production and MSPs hikes to strengthen rural economy ..................... 10
Tensions and policy uncertainty may limit global trade rebound ..................................... 12
Trade in services remains dynamic ...................................................................................... 12
External sector performance during April-October 2024 ................................................. 13
The trend in capital flows ..................................................................................................... 15
Formal Workforce on the Rise ............................................................................................. 16
Steady Growth of India’s Manufacturing Sector Employment: ........................................... 17
Annual Survey of Industries ......................................................................................................... 17
Cautious Rural Household Sentiments for Employment Prospects .............................................. 20
Conclusion and outlook ......................................................................................................... 21
Performance of High Frequency Indicators ........................................................................ 22
2Monthly Economic Review October 2024
Abstract
As 2024 draws to a close, the global economy reveals a mixed outlook. Structural weaknesses
in parts of Europe and China's slowdown continued to weigh on growth. In contrast, the US
economy has surpassed earlier expectations, maintaining steady expansion. Narrowing output
gaps and declining commodity prices have prompted central banks worldwide to shift their
policies and adopt more accommodative monetary stances. Against this backdrop, the IMF has
maintained its global growth projections for 2024 and 2025 at 3.2 per cent.
Set against this background, India quietly holds its ground. After a brief moderation over the
monsoon months, economic activity firmed up in October. Demand continues to grow steadily
as indicated by improving FMCG sales volumes in Q2 FY25 in both urban and rural areas.
Rural demand has been particularly striking as reflected in the robust growth of two-wheeler
sales and record-high tractor sales in October 2024. On the supply side, the Purchasing
Managers’ Index for manufacturing and services indicated strong activity in the secondary and
tertiary sectors.
Domestic retail inflation rose in October driven by elevated food inflation in a few vegetables.
Supply disruptions from heavy rains in major producing states contributed to price pressures
in tomatoes, onions, and potatoes, while elevated global prices drove up oil and fat inflation.
A bumper kharif harvest is expected to lower food inflation in the coming months. Favourable
monsoon, adequate reservoir levels and higher minimum support prices are likely to boost rabi
sowing and production.
Merchandise exports witnessed moderate growth during the first seven months of FY25, owing
to weak external demand and a fall in international commodity prices. Merchandise imports
performed well, supported by strong domestic demand. A larger increase in imports compared
to exports led to a widening of the trade deficit. After witnessing net inflows for five consecutive
months, foreign portfolio investors became net sellers in October. Heightened geopolitical
tensions and recent developments in China led to withdrawal of significant funds from Indian
equities. Net foreign direct investment inflows registered remarkable growth in the first five
months of FY25. Supported by stable capital inflows, India’s forex reserves increased by USD
64.8 billion1 so far during 2024, the second-largest increase after China amongst major forex
reserve-holding countries.
The labour market is showing signs of growth, as evidenced by high-frequency indicators such
as net payroll additions under the Employee Provident Fund Organisation, the employment
sub-index of the Purchasing Managers’ Index, and the Naukri JobSpeak index, all highlighting
a rise in formal employment and hiring. Results from the Annual Survey of Industries 2022-23
show robust growth in the manufacturing sector, with over 22 lakh jobs added compared to
2018-19, underscoring the sector's strong post-pandemic recovery. However, RBI surveys
1 As of 1st November 2024
3Monthly Economic Review October 2024
paint a more cautious picture of urban consumers' perceptions of employment conditions and
manufacturers' hiring sentiments.
Underwhelming global growth
1. Global economic activity in 2024 has been moderate thus far. While higher borrowing
costs and tight monetary conditions affected global growth, structural weaknesses are
restraining growth in a few major European countries such as Germany, France and Italy, and
China. On the other hand, the US economy continues to exhibit strong growth momentum
driven by consumption.
2. According to the latest global composite Purchasing Managers’ Index (PMI), global
economic expansion accelerated from September's eight-month low, driven by stronger
business confidence and growth in new order intakes.2 The services sector, particularly
financial services, led the expansion, while manufacturing activity remained stagnant. Service
sector business activity increased for the twenty-first consecutive month in October.
Manufacturing conditions remained lacklustre, although India, Spain, and Brazil topped the
manufacturing PMI growth rankings.3
PMI Manufacturing in Advanced PMI Manufacturing in Emerging Market
Economies Economies
Japan U.S. South Africa China
U.K. European Union India Indonesia
Global
Emerging Markets Brazil
60
60
55
55
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e d 50 x
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45 I
45
40
2 2 3 3 3 3 4 4 4 4 5 5 4 40
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F
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Source: Bloomberg
3. A gradual shift from goods to services consumption is underway, underpinning stable
global growth. This shift is boosting activity in the services sector in both advanced and
2 Global Composite PMI report (October 2024)
https://www.pmi.spglobal.com/Public/Home/PressRelease/16b271b3c4524743858e8f97ebe056de
3 Global Manufacturing PMI report (October 2024)
https://www.pmi.spglobal.com/Public/Home/PressRelease/0ea8f9b67c914cf58d83eaf2d9fb1093
4Monthly Economic Review October 2024
emerging markets while slowing down manufacturing. Manufacturing production is
increasingly shifting towards emerging market economies, as advanced economies experience
a decline in competitiveness.4
4. The International Monetary Fund (IMF), in its October 2024 World Economic Outlook
(WEO), has retained a global growth projection of 3.2 per cent for both 2024 and 2025. While
the global outlook remains stable, there are shifts in growth dynamics across various regions.
5. Projections for advanced economies as a group show stability, with growth in the
United States supported by stronger consumption resulting from robust increases in real wages
and non-residential investment. However, growth projections have been downgraded for some
European economies. Weaknesses in the manufacturing sector continue to constrain growth in
countries like Germany and Italy. The Euro Area is projected to experience modest growth
recovery in 2024 and 2025, driven by improvements in export performance and domestic
demand. Japan’s growth projection has been revised downwards, reflecting a temporary supply
disruption in the car industry and the base effect of historical data revisions. Conversely, growth
in the United Kingdom is expected to be supported by moderating inflation and interest rates,
which will contribute positively to stimulating domestic demand.
Growth Growth Projections Difference from July
Countries/ country (%) (%) 2024 WEO (%)
groups 2023 2024 2025 2024 2025
World 3.3 3.2 3.2 0 -0.1
Advanced Economies 1.7 1.8 1.8 0.1 0
United States 2.9 2.8 2.2 0.2 0.3
Euro Area 0.4 0.8 1.2 -0.1 -0.3
Japan 1.7 0.3 1.1 -0.4 0.1
United Kingdom 0.3 1.1 1.5 0.4 0
EMDEs (*) 4.4 4.2 4.2 0 -0.1
China 5.2 4.8 4.5 -0.2 0
India 8.2 7 6.5 0 0
Middle East and
Central Asia 2.1 2.4 3.9 0 0
Sub-Saharan Africa 3.6 3.6 4.2 -0.1 0.1
Source: IMF’s World Economic Outlook, October 2024
(*) Emerging Market and Developing Economies
4 As per IMF WEO (Oct 2024) ref Page 7-"....Consequently, behind stable growth figures, a global shift from
goods to services consumption is underway. This rebalancing is tending to boost activity in the services sector in
advanced and emerging markets but is dampening manufacturing. Manufacturing production is also increasingly
shifting toward emerging market economies—in particular, China and India—as advanced economies lose
competitiveness (Figure 1.10, panel 2)." 5Monthly Economic Review October 2024
Global disinflation underway
6. Price pressures across economies have abated substantially after peaking towards the
end of 2022, on account of central bank policy rate hikes and improved supply chain resilience.
As inflation approaches the central bank target levels, disinflation seems to have slowed on
account of sticky core inflation. This is due to persistence in services price inflation driven by
higher nominal wage growth. There are early signs of wage growth moderating, which this will
aid disinflation. In contrast, core goods price inflation has declined significantly. While supply
chains have adapted to ongoing geopolitical disturbances and led to a softening of commodity
prices, excess manufacturing capacity exists in a few major economies. Going forward,
inflation is expected to align with central bank targets. However, IMF notes that fiscal
consolidation across economies between 2022 and 2024 has not played out as planned, thereby
contributing to inflationary pressures. Adverse weather events and their effects on food prices
may also affect disinflation, particularly in EMEs.
Inflation in advanced economies Inflation in emerging market economies
USA UK India Indonesia
12 Canada Euro Area South Africa Mexico
China
10
10
8
8
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r e P4
tn
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2 2
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22222233333344444 22222233333344444
22222222222222222 22222222222222222
- n
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Source: OECD and MoSPI
Stable commodity prices as reflected in World Bank price indices
350
Energy Food Fertilisers Metals and Minerals
300
250
x200
e
d
n I150
100
50
0
2 2 2 2 3 3 3 3 4 4 4 4
2 2 2 2 2 2 2 2 2 2 2 2
- n a J -r p A -lu J -tc O - n a J -r p A -lu J - tc O - n a J -r p A -lu J -tc O
Source: World Bank Pink Sheet
6Monthly Economic Review October 2024
7. There is a broad consensus that after a successful disinflationary phase, monetary policy
will have to be eased in order to avoid recession. Central banks have begun to implement a
policy shift and reduced policy rates, and have signalled more to come. This is evident from
movements in Global Monetary Policy Tracker Index of the Council for Foreign Relations.
The index tracking 54 countries has values between (-)10 and 10. A value of (-)10 indicates
that all 54 countries have tightened monetary policy and vice versa. The index declined from
(-0.4) in January 2024 to (-)8.6 in October 2024 indicating that a majority of the countries under
consideration have loosened monetary policy.
Policy rates in advanced economies Policy rates in emerging market
economies
USA UK India Indonesia
Canada Euro Area South Africa Mexico
4 China
10
3
8
2
tn 1 tn6
e c
r e P 0
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r e P4
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2 2 2 2 3 3 3 3 4 4 4 4
2 2 2 2 3 3 3 3 4 4 4 4 2 2 2 2 2 2 2 2 2 2 2 2
2
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Source: Bank for International Settlements (BIS)
Monetary policy tracker indicating that most countries loosening policy
15
10
5
x
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d
n
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-5
-10
1 1 1 1 2 2 2 2 3 3 3 3 4 4 4 4
2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2
- n a J -r p A -lu J -tc O - n a J - r p A -lu J -tc O - n a J -r p A -lu J -tc O - n a J -r p A -lu J -tc O
Source: Council for Foreign Relations (CFR)
7Monthly Economic Review October 2024
Amidst renewed risks to global growth, India’s indicators improve
in October
8. A few downside risks to global growth have surfaced, of late. Financial assets such as
bond prices may be repriced if inflation proves stubborn, driven by global tensions and
commodity prices. That can lead to tighter conditions and potential market instability. This
may affect developing economies that are vulnerable to higher borrowing costs. Countries with
high external financing and low reserves face a heightened risk of sovereign debt stress. Rising
protectionism may also hamper growth. On the upside, stronger investment recovery in
advanced economies, along with increased private sector investment, could boost growth
prospects. Accelerated structural reforms, especially in labour participation and market
efficiency, could also support medium-term growth.
9. It is in this context, the latest data reveals that India is quietly holding its ground. After
a moderation in recent months, the October 2024 readings of high-frequency indicators of
economic activity point towards steady growth. Gross Goods and Services Tax collection rose
by 9.4 per cent in April -October 2024 over the same period last year, reflecting continued
momentum in the economic activity. India’s headline manufacturing PMI saw a substantial
increase in October5, reflecting the continued improvement in the economy's operating
conditions. Expanding new orders and international sales indicate robust demand growth for
India's manufacturing sector. As evidenced by the latest services PMI data, Indian service
providers sustained a strong rate of output expansion in October6, continuing a sharp and
accelerated growth trend that outpaced its long-run average. The services sector also witnessed
significant increases in consumer demand and job creation in October.
10. Domestic demand is holding steady. Data on fast moving consumer goods sales for Q2
FY25 released by Nielsen IQ point towards improving urban and robust rural volume growth.
The volume of E-way bills also recorded an all-time high in October, driven by festive demand.
Data from the Federation of Automobile Dealers Associations (FADA) shows that passenger
vehicle sales grew by 32.4 per cent in October 2024. Rural demand seems to have strengthened
further in October. Tractor sales grew by 22.4 per cent YoY in October 2024. An analysis by
5 India Manufacturing PMI report (October 2024)
6 India Services PMI report (October 2024)
8Monthly Economic Review October 2024
FADA on India’s 42-day festive period shows that two-wheeler sales were particularly robust,
increasing by 11.8 per cent YoY, driven by strong rural demand.7
Domestic food price pressures due to temporary supply disruptions
11. Consumer price inflation increased to 6.2 per cent in October 2024, primarily driven by
inflation in a few vegetables, oil, and fats. Pressures continued in tomatoes, onions, and
potatoes due to supply disruption caused by heavy rains in major producing states and tighter
market stock amid lower output last year. The increase in oil and fat inflation is largely driven
by imported inflation from elevated international prices of edible oils. On the positive side, a
continuous easing trend is visible in pulses, spices and sugar. The inflation rate in spices
remains in the negative territory. Core inflation rose to 3.8 per cent in October, but stayed lower
than last year, remaining at comfortable levels.
Food inflation remains elevated Higher contribution by TOP driving food
inflation
Headline Inflation
Potato Onion Tomato
Core Inflation
14 Food Inflation (CFPI) 63
41
12 O 0
T .4
t
n e c r e
P1 680 N
O
IT
U B IR T
N 4
29
9 .0
1
4 .3 17 .1 15 .5 1
7 .0
20
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12
4
O
C
.92
.8
T
2 N
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0 R
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3 3 3 3 4 4 4 4 4 P
2 2 2 2 2 2 2 2 2 OVERALL FOOD VEGETABLE
- - - - - - - - -
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c
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r
p A
n
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tc
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INF RL AA TT EION INF RL AA TT EION INF RL AA TT EION
Source: CSO, MoSPI
12. The average inflation rate stood at 4.8 per cent during April-October of FY25, down
from 5.5 per cent during the same period last year. Core inflation eased to 3.3 per cent,
compared to 4.9 per cent during April-October FY24. The government has been undertaking
various measures to stabilise the prices of essential commodities while providing relief to
consumers. These actions include strategic offloading of stocks from the buffer inventory to
enhance market supply, implementation of stock limits to curb hoarding practices and provision
of essential food items at subsidised rates.
7 https://fada.in/images/press-
release/16736d58d7db2fFADA%20Releases%2042%20Days%20Festive%20Period%20Vehicle%20Retail%20
Data.pdf
9Monthly Economic Review October 2024
A rise in international edible oil prices Oils and fats Inflation (YoY)
Sunflower oil Soybean oil
Palm kernel oil 15
1400 2000
10
1600 5
1200
tn 0
T 1200 T e c
M /$1000 800 M /$ r e P -5
-10
800
400 -15
600 0 -20
4 4 4 4 4 4 4 4 4 4 3 3 3 3 4 4 4 4
2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2
- n a J - b e F -ra M -r p A -y a M -n u J -lu J -g u A - p e S - tc O - n a J - r p A - lu J - tc O - n a J - r p A - lu J - tc O
Source: Pink Sheet, World Bank Source: CSO, MoSPI
Robust food grain production and MSPs hikes to strengthen rural economy
13. As per the First Advance Estimates, production of major Kharif crops for 2024-25 is
estimated at a record 164.7 million tonnes, higher by 5.7 per cent compared to 2023-24 and 8.2
per cent higher than the average food grain production in the past five years. The estimated
increase is mainly on account of the rise in rice, maize, coarse grains and oilseeds output.
Despite increased acreage, pulses production estimates remain marginally lower, primarily due
to crop damage from excessive rains in key producing regions.
14. The Government increased the Minimum Support Prices (MSPs) of various crops for
both Kharif and Rabi seasons. For the Kharif marketing season 2024-25, the increase in MSPs
was in the range of 1.4 per cent to 12.7 per cent while the MSPs for the Rabi marketing season
2025-26, were higher in the range of 2.4 per cent to 7.0 per cent. The increase is likely to
incentivise crop diversification and support farmers' income. As of 6th November 2024, paddy
procurement reached 161.0 lakh metric tonnes, benefiting 14.79 lakh farmers from the ongoing
KMS procurement operations. The record Kharif food grain production with increased MSPs
will further strengthen the rural economy.
15. Announcement of higher MSPs is likely to encourage healthy rabi sowing. The
availability of inputs for the rabi sowing season is reported to be adequate, which bodes well
for the upcoming agricultural activities. Quality seed availability surpasses the requirement by
30.9 lakh quintals of seeds, ensuring ample supply for sowing. Fertiliser availability remains
in a comfortable position as of 28 October 2024. The closing stock of all major fertilizers was
above the required levels, except for di-ammonium phosphate which was largely due to
geopolitical factors causing vessels to take longer routes, resulting in delayed availability.
10Monthly Economic Review October 2024
Record food grain production Higher MSPs to boost rabi sowing
180 YoYchange in MSP for RMS 2025-26
2023-24 2024-25(FAE)
160
Barley 7.0%
140
s e120 Wheat 6.6%
n
n
o100
T Rapeseed &
n o 80 Mustard
5.3%
illiM
60
Lentil
4.3%
(Masur)
40
Gram 3.9%
20
0 Safflower 2.4%
Foodgrain Rice Pulses Coarse Cereals
Source: Ministry of Agriculture & Farmers Welfare
Fertiliser availability in comfort zone All-time high tractor sales in October
Availability 160
100 Cumulative Requirement during Oct 2024 140
120
80
100
s
d
60 n 80
a
T s
M u o 60
L h
40 T
40
20
20
0
4 7 0 3 6 9 2 5 8 1 4
9 9 0 0 0 0 1 1 1 2 2
0 -tc -tc -tc -tc -tc -tc -tc -tc -tc -tc -tc
UREA DAP MOP NPK SSP O O O O O O O O O O O
Source: CWWG Minutes, Ministry of Agriculture & Source: SIAM
Farmers Welfare
16. Adequate storage in the reservoir has ensured a steady supply of water for crop
irrigation. As of 7 November 2024, reservoir storage levels in all regions, except the Northern
region, were higher than the corresponding period last year and exceeded normal storage levels.
Tractor sales volume reached an all-time high in October, registering a double-digit YoY
growth. This was driven by favourable conditions set by the healthy monsoon, bumper kharif
harvest and higher MSPs announcements on major rabi crops.
17. Going ahead, the inflation trajectory will largely be influenced by the price movements
in edible oils, tomato, onion and potato. On the positive side, the early trend visible in vegetable
prices in November so far signals significantly lower inflation in tomato and onion. The
estimate of bumper kharif production is likely to lower food inflation in the upcoming months.
11Monthly Economic Review October 2024
On the other hand, international edible oil prices are currently on an upward trend, and its
reflection is visible in the domestic prices as well.
Tensions and policy uncertainty may limit global trade rebound
18. The United Nations Conference on Trade and Development (UNCTAD)’s, latest 2024
Trade and Development Report 20248 points out that after experiencing a contraction in 2023,
international trade in goods and services is expected to rebound by 2 per cent to 3 per cent in
real terms in 2024. The UNCTAD nowcast model has predicted the value of global exports to
approach nearly USD 32 trillion in 2024. However, regional developments are likely to be
uneven. While global trade revenues are rising again, they are not expected to exceed the record
levels achieved in 2022. This is mainly due to a decline or stagnation, in real terms, in exports
from most of the developed countries and a fall in key international commodity prices.
According to the report, several leading indicators also signal weaker prospects for
merchandise trade in the coming quarters. For example, the October release of the global
manufacturing Purchasing Managers’ Index showed that the new export orders component has
decreased for the fifth consecutive month.
Trade in services remains dynamic
19. UNCTAD has noted that the outlook for service trade in 2024 is relatively more positive
than that for merchandise trade. World services exports (in dollar terms) increased by 9 per
cent in Q1 of 2024 (on a seasonally adjusted annualised rate) compared to the previous quarter.
Notably, high carbon emissions-intensive services experienced even faster growth, with travel
and transport services expanding by 18 per cent and 15 per cent, respectively. Other
commercial services saw a growth of 5 per cent in the same quarter. For the remainder of 2024,
(Q2-Q4) service trade is expected to continue expanding, with projected growth rates of 2 to 5
per cent (QoQ) significantly lower than the growth rate observed in Q1 of 2024. Revenue from
services exports is expected to increase by 6 per cent in 2024 on a YoY basis.
8 https://tinyurl.com/y8x5mksp
12Monthly Economic Review October 2024
Trade in services showed more dynamism than merchandise trade
Source: UNCTAD
Note: All series are seasonally adjusted. Estimates from UNCTAD Nowcasts for the second to fourth quarters
of 2024
External sector performance during April-October 2024
20. India’s merchandise exports experienced a marginal increase of 3.2 per cent (YoY
basis) during April-October 2024. This moderate growth can be primarily attributed to a decline
in the value of petroleum product exports, which fell due to a fall in international commodity
prices. Non-petroleum exports (same comparison basis) were up 7.3%. Non-petroleum and
non-Gems and Jewellery were up 8.9 per cent. Specific sectors like drugs and pharmaceuticals,
engineering goods, and chemicals saw an increase in exports, growing by 8 per cent, 9.7 per
cent, and 7.7 per cent respectively, during April-October 2024 on a YoY basis. Textile exports
also saw an increase of 2.4 per cent during April-October 2024 compared to the corresponding
period of the previous year. On the other hand, rising inflationary pressures on cereals, pulses,
and edible oils limited the exports of agricultural and allied products.
Commodity-wise merchandise exports Commodity-wise merchandise imports
FY24 FY25 FY24 FY25
April-October April-October
12.8
Non-ferrous metals
Textiles 9.6 15.2
9.8
29.5
Chemicals 16.8 Gold 34.2
15.6
28.7
17.0 Machinery
Drugs & Pharma 30.6
15.8
6.3 Electronic goods 51.3
Cereals 56.3
5.2
Engineering goods 61 6.5 7.5 Petroleum products 1 10 00 7.1 .2
47.6 224.1
Petroleum products Non-oil, non-gold
40.9 234.7
0 20 40 60 80 0 100 200
USD billion USD billion
Source: DGCIS, M/o Commerce and Industry
13Monthly Economic Review October 2024
21. Owing to strong domestic demand, India’s merchandise imports grew by 5.8 per cent
year-on-year during April-October 2024. This increase is largely due to a rise in non-oil, non-
gold imports, which reached USD 275.6 billion compared to USD 264.6 billion during the
same period last year, indicating a rebound in domestic consumption despite the inflationary
impact. Gold imports increased due to higher international prices, driven by frontloading ahead
of festival spending and demand for safe-haven assets. Among the major non-oil, non-gold
imports, non-ferrous metals, and capital goods reflected growing demand for capital
accumulation. Electronic goods also maintained consistent momentum, signalling a rise in
discretionary consumer spending. Additionally, imports of pulses rose to support domestic
production and control inflation.
22. As a result of moderate export growth coupled with a significant increase in imports,
India’s merchandise trade deficit widened to USD 164.7 billion in April-October 2024,
compared to USD 149.7 billion in the same period last year. Services exports continued to rise,
growing by 12.5 per cent in this period, which contributed to an increase in net services receipts
from USD 89.7 billion in the first seven months of FY24 to USD 101.4 billion during the
corresponding period of FY25. Services exports + Non-Petroleum and non-Gems and
Jewellery exports were up 10.8 per cent in April-October 2024 compared to the same period
last year.
Merchandise trade deficit widened Rise in net services receipts
during April-October 2024
Trade deficit Exports Imports Services exports Services imports
500 April-October Net services receipts
250 April-October
400
300 200
n
o
n
o
illib
D12 00 00
illib
D
S
U150
6
S U 0 100 8 1 8 1 2 9 1 1 2
-100 50 6 1 1 3 1 8 4 0 1 2 0 1 5 1 1
6 7
6
-200
0
FY21 FY22 FY23 FY24 FY25
FY21 FY22 FY23 FY24 FY25
Source: DGCIS, M/o Commerce & Industry
23. Going forward, there is likely to be continued upward pressure on the trade deficit,
driven by a faster pace of import growth. Rising commodity prices, particularly for industrial
inputs and metals, are expected to contribute to imported inflation and increase the import bill.
Exports face greater uncertainties influenced by geopolitical risks and the modest monetary
policy responses of major global central banks.
14Monthly Economic Review October 2024
The trend in capital flows
24. Foreign Portfolio Investors (FPIs) became net buyers in the Indian equity market
starting in June 2024 after being the next sellers in the first two months of FY25. This trend
continued until September 2024, showcasing a clear preference for Indian equities as FPIs
injected substantial capital into the market over those months. However, in October, this trend
reversed, resulting in a net outflow of USD 11.5 billion. Factors such as concerns about slowing
earnings growth, high valuations, rising geopolitical tensions, and recent developments in
China9 led FPIs to withdraw significant funds from Indian equities in October. Overall, due to
mixed trends, FPI inflows between April and October 2024 moderated to USD 10.1 billion,
compared to USD 18.6 billion during the same period the previous year.
25. Foreign Direct Investment (FDI) recorded a revival in FY25, with net FDI inflows
rising from USD 10.4 billion during H1 of FY24 to USD 14.3 billion in the corresponding
period of FY25, which is a YoY growth of 37.6 per cent. The rise in net FDI inflows can be
attributed to an increase in gross FDI inflows. Manufacturing, financial services, electricity and
other energy sectors, and communication services contributed to around two-thirds of the gross
FDI inflows. Singapore, Mauritius, the Netherlands, the UAE, and the US were sources for
about three-fourths of the flows. Though cumulative net FDI inflows in H1 of FY25 were
greater than those in the same period of the previous year, there was an outflow of net FDI in
September 2024 due to a significant increase in repatriation and disinvestment, which exceeded
the gross FDI inflows during that month.
The trend in FPI flows Rise in Foreign Direct Investment
15 Gross FDI Inflows Net FDI inflows
11.2
10.1 April-September
50
10
6.8 6.3 5.8
5 2.9 40
1.7
n n
o o
illib
D
0
-1.7
-0.8
-1.9
illib
D30
S-5 S
U U20
-10
-11.5 10
-15
3 3 3 3 3 4 4 4 4 4
2 2 2 2 2 2 2 2 2 2
-r p A -n u J -g u A -tc O - c e D - b e F -r p A -n u J -g u A -tc O 0 FY18FY19FY20FY21FY22FY23FY24FY25
Source: NSDL Source: RBI
9 These include the stimulus measures announced by the Chinese Government and the cheap valuation of Chinese
stocks
15Monthly Economic Review October 2024
26. After surpassing the USD 700 billion mark, India’s foreign exchange reserves
moderated to USD 684.8 billion at the end of October 2024, sufficient to cover 11.8 months of
imports and more than 100 per cent of external debt at the end of June 2024. Supported by
stable capital inflows, as of 1st November 2024, India’s forex reserves increased by USD 64.8
billion so far during 2024, the second-largest increase after China amongst major forex reserve-
holding countries. Foreign currency assets accounted for the majority of the increase in forex
reserves during 2024.
27. The Indian rupee emerged as one of the least volatile currencies during FY25, staying
within the range of USD 84.3-84/dollar during April-October 2024, exhibiting a coefficient of
variance of 0.28 per cent.
Forex reserves sufficient to cover 11.8 months of imports
750
700
650
n o600
illib550
D
S U500
450
400
2 2 2 2 2 2 2 2 2 3 3 3 3 3 3 3 3 3 3 3 3 4 4 4 4 4 4 4 4 4 4
2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2
-r p A -y a M -n u J -lu J -g u A - p e S - tc O -v o N - c e D - n a J - b e F -ra M -r p A -y a M -n u J -lu J -g u A - p e S -tc O -v o N - c e D - n a J - b e F -ra M -r p A -y a M -n u J -lu J -g u A - p e S -tc O
Source: RBI
Formal Workforce on the Rise
28. The Employees’ Provident Fund Organization (EPFO) added 9.5 lakh new members in
September 2024. Notably, 59.9 per cent of the new members added in September 2024 were
in the 18–25 age group, consistent with the trend that most individuals joining the organised
workforce are youth, mainly first-time job seekers.
29. The purchasing managers’ employment sub-index remained strong, continuing to be in
the expansionary zone for the eighth consecutive month in October. Though employment in
the manufacturing sector softened in September, it regained momentum with the resurgence of
the sub-index in October. Employment in services witnessed a marked expansion with the
employment sub-index being at the highest level in the past 26 months. The Naukri Jobspeak
index signals expansion in hiring activity in white-collar jobs with strong growth in October
2024, reaching 2733 points and marking a significant 10 per cent year-on-year increase. Sectors
16Monthly Economic Review October 2024
like AI-ML (39 per cent), Oil and Gas (18 per cent), Global Capability Centers (GCCs) (17 per
cent), Real Estate (14 per cent), Pharma (12 per cent), FMCG (8 per cent), and IT/Software
Services (6 per cent) were the major drivers of the growth, with strong year-on-year increases
in hiring in these sectors. Freshers hiring witnessed a positive growth, with workers having 0-
3 years of experience witnessing a 6 per cent year-on-year increase in job opportunities.
Employment sub-indices in PMI at Expansion of Nauk ri Jobspeak index
high levels
Employment_Manufacturing Overall index YoY Growth (RHS)
Employment_Services
3,500
56
3,000 110%
54
2,500
e
52 u la2,000 60%
e v
u la50 x e1,500
v d
x
n
I1,000 10%
e
d48
n I 500
46 0 -40%
1 2
n
1 2
y
1 2
p
2 2
n
2 2
y
2 2
p
3 2
n
3 2
y
3 2
p
4 2
n
4 2
y
4 2
p
0 2
-
1 2
-
1 2
-
2 2
-
2 2
-
3 2
-
3 2
-
4 2
-
4 2
-
a J a M e S a J a M e S a J a M e S a J a M e S tc O r p A tc O r p A tc O r p A tc O r p A tc O
Source: HSBC Purchasing Managers’ Index, S&P Source: Naukri Jobspeak Index
Steady Growth of India’s Manufacturing Sector Employment:
Annual Survey of Industries
30. The Annual Survey of Industries (ASI) results for the financial year 2022-23 highlight
the manufacturing sector's resilience, showing a more than 7 per cent increase in employment
over the previous year.10 This translates into an addition of over 22 lakh jobs in FY 23 over FY
19 (pre-pandemic level), underscoring the sector's robust post-pandemic recovery. During the
pandemic in FY 21, the sector lost approximately 5 lakh jobs. The growth of the sector in FY
23 indicates a strong rebound of the sector as economic conditions improved.11
31. The ASI results indicate that alongside an increase in employment, the manufacturing
sector experienced gains in overall productivity. This is demonstrated by the increase in output
per person engaged as well as the stabilization of the Net value added per person engaged.
Trend in employment in organised Employment per factory
manufacturing sector
10 The Annual Survey of Industries (ASI), conducted by the MoSPI, covers the organised manufacturing sector.
Its coverage extends to the entire Factory Sector comprising industrial units (called factories) registered under the
Sections 2(m)(i) and 2(m)(ii) of the Factories Act, 1948, with ten or more workers with electricity or twenty or
more workers without electricity.
(https://www.mospi.gov.in/sites/default/files/asi_results/ASI%20Summary%20Results%202022-23.pdf)
11 It may be noted that employment refers to total persons engaged (TPE). 17Monthly Economic Review October 2024
200 100
185
90
180 166 90
161 84
s h k a L 160 146 s r e b m80 80
n I 140 131 126 u N 71
70 66
120 63
100 60
8 1 -7
1 0 2
9 1 -8
1 0 2
0 2 -9
1 0 2
1 2 -0
2 0 2
2 2 -1
2 0 2
3 2 -2
2 0 2
8 1 -7
1 0 2
9 1 -8
1 0 2
0 2 -9
1 0 2
1 2 -0
2 0 2
2 2 -1
2 0 2
3 2 -2
2 0 2
Number of Workers Total Persons Engaged per Factory in Operation
Total Person Engaged (TPE) Workers per Factory in Operation
Source: Annual Survey of Industries, MoSPI
Trends in value added and wages Trend in labour productivity in
organized manufacturing sector
12 100
10.2
10 78.3
s s 80
h k 7.9 h k
a L 8 7.3 a L
₹ ₹
n n 60 51.7 54.0 54.8
I 6 I
4 40
8 9 0 1 2 3 8 9 0 1 2 3
1 1 2 2 2 2 1 1 2 2 2 2
- - - - - - - - - - - -
7 8 9 0 1 2 7 8 9 0 1 2
1 1 1 2 2 2 1 1 1 2 2 2
0 0 0 0 0 0 0 0 0 0 0 0
2 2 2 2 2 2 2 2 2 2 2 2
Net Value Added per Person Engaged Output per Person Engaged
Source: Annual Survey of Industries, MoSPI
32. In ASI 2022-23, the top five states with the highest employment in the manufacturing
sector were Tamil Nadu, Maharashtra, Gujarat, Uttar Pradesh, and Karnataka. Together, these
states accounted for approximately 55 per cent of total manufacturing employment for the year.
It may be noted that in the financial year 2022-23, 43 per cent of the factories in operation and
45 per cent of the total employed people are in rural areas. During the period FY20- FY23, the
wages per worker in rural areas grew at 6 per cent CAGR vis a vis 5 per cent CAGR in urban
areas.
33. Seven industry groups in the sector contribute to around 60 per cent of the total
employment in the sector- Food Products, Textiles, Basic Metals, Wearing Apparel, Motor
Vehicles, Trailers and Semi-Trailers, Machinery and Equipment N.E.C., and Chemicals and
Chemical Products. Out of these leading industry groups, Machinery and Equipment N.E.C,
Basic Metals, Motor Vehicles, Trailers and Semi-Trailers, and Food Products have shown the
18Monthly Economic Review October 2024
highest growth compared to the pre-pandemic period.12 Other than these leading industries,
industry groups representing Computer, Electronic and Optical Products and Manufacture of
Furniture have seen a strong growth in employment compared to pre-pandemic level with
around 50 per cent growth in total person engaged. This indicates a positive shift towards
making India a global leader in electronics manufacturing and powering up India’s
participation in the global electronics value chain.
Industry groups registering the highest share in employment
Share in TPE in FY 23 Share in TPE in FY 20 Growth compared to pre pandemic period (FY 20)
14% 20%
19% h
la
to
t
f
o
e11 802 %%
%
15%
17% 17%
13%
11 26
%%tw
o
r G
tn
e
g C
a tn 6% 8% r
e
e c r e 4% 6% 5% 4% P
P 2%
0% 0%
s
tc
u d o r P d o o F
s
e
litx e T
s
la
te M c is a B
le
r a p p A g n ir a e W
s
r
e lia r T ,s e lc ih e V
r o
tos r e lia r T - im e S
d n A
tn
e m p iu q E d n A y
r e n
ih.C .E .N
la
c im e h C d n A s la
c im
es tc u d o r P
M c h
a C
M
Source: Annual Survey of Industries, MoSPI
34. The ASI 2022-23 results indicate a continued increase in the number of large factories
employing more than 100 workers has continued. The number of such factories increased by 7
per cent compared to 2021-22; in contrast, the number of factories employing less than 100
workers increased by only 2 per cent. Despite this trend, the large factories still make up a
relatively small share, comprising around 22 per cent of the total factories in operation in the
sector.
35. In terms of the share of employment, large factories in the sector employ a larger share
of workers. The factories with more than 100 workers employ around 80 per cent of the total
workers in the sector and 78 per cent of the total persons engaged in the sector, whereas the
small factories, although larger in number, comprise a smaller share of employment in the
sector. The wages per worker indicate a positive trend in the quality of employment, with the
larger factories providing higher wages (refer to charts below).
12 It may be noted that employment refers to total persons engaged (TPE).
19Monthly Economic Review October 2024
Larger factories generating greater share of employment
Share in total factories Share in total TPE
la 40%
to
t
n
i
e
30%
r
a
h
s
e
20%
g
a
tn
e c 10%
r
e
P
0%
4 9 9 9 9 9 9 9 9 9 e
1 1 2 4 9 9 9 9 9 9 v
- - - 0 - - - 5 1 - - - 0 2 - - - 0 3 - - - 0 5 1 - - 0 0 4 - - 0 0 9 - - 0 0 9 1 - 0 0 9 4 - - 0 o b A &
Employme1 nt Size 2 5 0 1 0 0 2 0 0 0
5
Source: Annual Survey of Industries, MoSPI
36. The recent quarterly Periodic Labour Force Survey (PLFS) for the period July –
September 2024 highlights encouraging trends in urban employment for Q2 of FY 2024-25.13
The urban unemployment rate has shown a year-on-year improvement, dropping from 6.6 per
cent in Q2 FY 2023-24 to 6.4 per cent in Q2 FY 2024-25. This positive shift aligns with a
broader strengthening of workforce metrics, as the Labour Force Participation Rate (LFPR)
increased from 49.3 per cent to 50.4 per cent, and the Worker-to-Population Ratio (WPR) rose
from 46 per cent to 47.2 per cent during the same period. These indicators suggest a healthier
and more engaged urban labour market.14
Cautious Rural Household Sentiments for Employment Prospects
37. The Rural Economic Conditions and Sentiments Survey (RECSS), conducted by the
National Bank for Agriculture and Rural Development (NABARD), provides quantitative and
qualitative data for assessing the state of the rural economy. The survey offers backward-
looking (economic conditions) and forward-looking (household sentiments) information on a
limited set of key variables such as income, consumption, savings, employment prospects etc.15
38. The Round II (November) results of the RECSS indicate a cautiously optimistic outlook
of rural households on employment prospects.16 Over half of the survey respondents expect
13 PLFS Quarterly Bulletin on Employment and Unemployment Indicators for July- September 2024
https://www.mospi.gov.in/sites/default/files/publication_reports/QuarterlyBulletinPLFS_July_September_2024.
pdf
14 For current weekly status (CWS) for age 15 years and above.
15 The survey is designed to be carried out as six bi-monthly rounds per year, with the first round of the survey
conducted in September 2024. Each round of the RECSS covers a sample size of around 600 villages covering
6000 households (10 households from every sample village). 20
16The November 2024 round (Round II) of the Rural Economic Conditions and Sentiments Survey (RECSS) was
conducted during the last week of October 2024 and the first week of November 2024.Monthly Economic Review October 2024
improvements in income and employment conditions in the coming quarter, while fewer than
10 per cent expressed concern over possible deterioration in these two. However, compared to
the September survey round, the overall net sentiment for the next quarter appears slightly
subdued, signaling tempered expectations.
Conclusion and outlook
39. Amidst a clouded global background, and after a brief period of softening momentum
over the monsoon months, many high-frequency indicators of economic activity in India have
shown a rebound in October. These include indicators of rural and urban demand and supply
side variables like Purchasing Managers’ Index and E-way bill generation. On the employment
front, the formal workforce is expanding, with notable increases in manufacturing jobs and a
strong inflow of youth into organised sectors.
40. On the external front, India's export recovery may encounter challenges due to softening
demand in developed markets. However, trade in the services sector is sustaining momentum.
Apart from the emerging indications of domestic growth and stability, the dynamics of global
interest rates, earning growth and valuation, geopolitical developments and policy decisions of
the next administration in the United States will determine the course of trade and capital flows.
Recent developments in the ongoing conflict between Russia and Ukraine have caused some
concern in financial markets with safe-haven assets such as US Treasuries and gold finding a
bid. Geopolitical conditions remain fragile.
41. Moving forward, India's economic outlook for the coming months is cautiously
optimistic, with agriculture likely to benefit from favourable monsoon conditions, increased
minimum support prices and adequate supply of inputs. Bright agricultural production
prospects make the inflation outlook benign, despite existing price pressures in select food
items. Early November trends signalled moderation in key food prices, though geopolitical
factors may continue to impact domestic inflation and supply chains.
***** *****
For feedback and queries, one may write to: mer-dea@gov.in
(https://www.nabard.org/auth/writereaddata/tender/pub_1811241025311187.pdf )
This document has been prepared by Bharadwaja Adiraju, Esha Swaroop, Harish Kumar
Kallega, Megha Arora, Radhika Goyal, Shruti Singh and Sonali Chowdhry
21Monthly Economic Review October 2024
Performance of High Frequency Indicators
Year to Date Year to Date (YoY Growth)
YTD Period/As
Data Title Unit at the end of 2022-23 2023-24 2024-25 2022-23 2023-24 2024-25
Agriculture
Fertiliser Sales Mn Tonnes Apr-Sep 33.5 33.8 33.6 13.8 0.9 -0.7
Domestic Tractor Sales Lakh Apr-Oct 6.1 5.9 6.2 9.8 -3.8 5.0
Foodgrain Production (Kharif) Mn Tonnes 1st AE 149.9 148.6 164.7 -0.4 -0.9 10.9
Reservoir Level Bn Cu. Metres 7-November 158.6 124.1 154 12.0 -21.8 24.1
Credit to Agriculture and allied activities ₹ Lakh crore Sep 16.0 18.7 21.7 13.1 16.8 16.2
Industry
IIP Index Apr-Sep 135.1 143.5 149.3 7.1 6.2 4.0
8-Core Industries Index Apr-Sep 143 154.7 161.2 9.7 8.2 4.2
Domestic Auto sales Lakh Apr-Oct 122.1 130.5 147.6 25.6 6.9 13.1
PMI Manufacturing Index Apr-Oct 55.2 57.6 57.7 4.0 4.3 0.2
Power consumption Billion kWh Apr-Oct 905.4 842.4 1028.9 10.3 -7.0 22.1
Natural gas production Bn Cu. Metres Apr-Sep 17.2 17.9 18.2 1.7 4.0 1.5
Cement production Index Apr-Sep 163.3 182.2 185.2 11.0 11.6 1.6
Steel consumption Mn Tonnes Apr-Oct 65.9 76 85.7 12.1 15.3 12.8Monthly Economic Review October 2024
Year to Date Year to Date (YoY Growth)
YTD Period/As at
Data Title Unit the end of 2022-23 2023-24 2024-25 2022-23 2023-24 2024-25
Inflation
CPI-C Index Apr-Oct 173.4 182.9 191.7 7.1 5.4 4.8
WPI Index Apr-Oct 153.5 151.2 154.4 13.4 -1.5 2.1
CFPI Index Apr-Oct 174.2 185.7 201.0 7.7 6.6 8.3
CPI-Core Index Apr-Oct 171 179.3 185.3 6.1 4.9 3.3
Services
Domestic Air Passenger Traffic Lakh Apr-Sep 1242.7 1503.3 1599.1 116.1 21.0 6.4
Port Cargo Traffic Million tonnes Apr-Oct 446.7 464.6 482.0 9.9 4.0 3.7
Rail Freight Traffic Million tonnes Apr-Aug 620.9 634.7 653.2 10.3 2.2 4.9
PMI Services Index Apr-Oct 55.2 57.6 59.8 3.9 4.4 3.9
Fuel Consumption Million tonnes Apr-Oct 126.0 133.7 137.6 13.2 6.1 3.0
UPI (Volume) Crore Apr-Oct 4608.2 7016.4 10225.0 103.3 52.3 45.7
E-Way Bill Volume Crore Apr-Oct 53.8 63.2 73.7 26.6 17.5 16.6
Fiscal Indicators
Gross tax revenue (Central Govt) ₹ Lakh crore Apr-Sep 13.9 16.2 18.1 17.6 16.3 12.0
Revenue Expenditure ₹ Lakh crore Apr-Sep 14.8 16.3 17.0 6.0 10.0 4.2
Capital Expenditure ₹ Lakh crore Apr-Sep 3.4 4.9 4.1 49.5 43.1 -15.4
Fiscal Deficit ₹ Lakh crore Apr-Sep 6.2 7.0 4.7 17.7 13.2 -32.4
Revenue Deficit ₹ Lakh crore Apr-Sep 3.1 2.3 0.7 -1.4 -25.6 -68.0
GST Collection ₹ Lakh crore Apr-Oct 10.5 11.6 12.7 28.6 11.4 9.4
23Monthly Economic Review October 2024
Year to Date Year to Date (YoY Growth)
YTD Period/As
Data Title Unit at the end of 2022-23 2023-24 2024-25 2022-23 2023-24 2024-25
External Sector
Merchandise exports USD Billion Apr-Oct 263.3 244.5 252.3 12.5 -7.1 3.2
Non-oil exports USD Billion Apr-Oct 206.2 196.9 211.4 3.1 -4.5 7.3
Merchandise imports USD Billion Apr-Oct 430.5 393.7 417 31.2 -8.5 5.9
Non-oil non-gold/silver imports USD Billion Apr-Oct 278.7 262.4 272.9 29.2 -5.9 4.0
Net FDI USD Billion Apr-Sep 25.4 10.4 14.3 -15.9 -59.0 37.6
Exchange Rate INR/USD Apr-Oct 79.0 82.5 83.7 6.7 4.4 1.3
Foreign Exchange Reserves USD Billion 1 Nov 530 590.8 682.1 -17.3 11.5 15.5
Foreign Portfolio Investors USD Billion Apr-Oct -7.8 18.6 10.1 - - -
Import Cover Months Oct 8.9 10 11.8 - - -
Monetary and Financial
Total Bank Credit ₹ Lakh crore 1 Nov 129.3 150.0 169.8 15.8 16.0 13.2
Non-Food Credit ₹ Lakh crore 1 Nov 128.9 149.8 169.5 16.3 16.2 13.2
10-Year Bond Yields Per cent Apr-Oct 7.3 7.1 7 1.2 -0.2 -0.1
Repo Rate Per cent 19 Nov 5.9 6.5 6.5 1.9 0.6 0.0
Currency in Circulation ₹ Lakh crore 8 Nov 32.2 33.6 35.7 9.6 4.3 6.1
M0 ₹ Lakh crore 8 Nov 41.3 44.2 47.1 12.4 7.0 6.6
Employment
Net payroll additions under EPFO Lakh Apr-Sept 71.6 70.5 91.1 36.5 -1.6 29.3
Number of person demanded
employment under MGNREGA Crore Apr-Oct 20.3 21.4 18.2 -20.2 5.8 -14.9
-2.6 -0.6 -0.2
Urban Unemployment Rate Per cent July-Sept 7.2 6.6 6.4
Subscriber Additions: NPS Lakh Apr-Aug 3.2 3.3 3.7 8.2 3.8 13.7
24