Economics
India’s Economic Recovery Falters as High Prices Start to Bite
- High-frequency indicators give mixed signals on demand revival
- Weak rupee preventing faster pass-through of commodity slump
Piles of rice paddy at a wholesale market on the outskirts in New Delhi, India.
Photographer: Anindito Mukherjee/BloombergThis article is for subscribers only.
India’s economic activity showed early signs of cooling off in June as acute price pressures, rising interest rates, and a falling rupee dampened sentiment after a strong showing the previous month.
Softer increases in factory orders dragged the manufacturing sector, pushing the needle on a dial measuring so-called ‘Animal Spirits’ back to 5, from 6 earlier. The gauge, based on eight high-frequency indicators compiled by Bloomberg News, uses a three-month weighted average to smooth out volatility. A move to left signifies a loss of momentum.