Economic activity holding up despite global headwinds: Finmin monthly review

New Delhi, July 14 (Agency) Economic activity is holding up better than expected despite the ongoing geopolitical tensions, rise in interest rates in the US and in India and the elevated price of crude oil and few other commodities, said Finance Ministry’s Monthly Economic Review (MER) for June released on Thursday. “The services sector recovery is continuing and manufacturing strength is steady. There is an apparent keenness to invest on the part of the private sector. Banks are willing to lend and their financial health, as the central bank’s stress tests reveal, is quite strong. Brisk GST receipts monthly confirm the momentum in the economic activity,” the report said. The report stated that recent moderation in the international prices of food items, industrial metals and even crude oil are welcome developments for India’s inflation control.

“Recent revenue generation measures announced by the government will not only help to rein in the rise in the current account deficit but also ensure that fiscal slippage, if any, is well contained,” the monthly document said. “In sum, at the margin, June and the first ten days of July were better for Indian macro than the first two months of the current financial year. That is some cause for relief and even cautious optimism in these times,” it concluded. The report said rising capex in the public sector may have also begun to crowd-in private investment as seen in preliminary data collated for Q1 of 2022-23. “In this quarter, the share of the Indian private sector in total investment proposals reached a record high of 85 per cent , rising from an average of 63 per cent in the preceding four quarters,” the report said.