India's economic activity rose sharply to an eight-month high of 10.1 per cent in October on the back of base factors, as against 6.6 per cent in the previous month, the ICRA said in its report on Thursday.
According to the report by ICRA, a credit rating agency, the acceleration in growth momentum was largely due to the favorable impact on sectors such as mining and electricity of the departure of the monsoon, healthy demand during the festive period fuelled vehicle registrations, fuel consumption, air travel and export growth.
Early data for November seems positive, it added: "with a base-effect led pick-up in electricity demand growth and a continued festive boost in vehicle registrations".
Economic activity growth was led by an improvement in 10 of the 16 indicators. The ICRA 'Business Activity Monitor' surged by 9.9 per cent month-onmonth in October, higher than 6.5 per cent growth seen in October 2023, partly led by an early onset of the festive season.
This is the highest sequential growth in any month since March 2023 (+10.5 per cent).
According to the Vahan data, average daily vehicle registrations had surged to 108.4k units during November 1-18, which exceeded the full-month average of 96.4k units in the previous peak and 92.0k units in November 2023, while it was at par with October 2024.
The festive season demand primarily supported this trend, which closed on November 13.
According to ICRA, daily average registrations are expected to normalize by the end of the month.
Besides, electricity demand growth improved to 3.2 per cent during November 1-17 from 1.1 per cent in October, partly supported by a favourable base.
Additionally, the growth in non-oil exports surged to 25.6 per cent from 6.8 per cent in September 2024, led by sectors such as electronic goods, engineering goods, chemicals and readymade garments.
These trends reinforce the credits rating's expectations of a pick-up in the GDP growth in Q3 FY2025 as compared to H1 FY2025, said the report.
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