Week in Numbers – Tracking India’s Economic Pulse

Nut Graph
Indian PMIs continue to surprise with data suggesting record activity in the private sector.  The HSBC Flash India Composite Output Index rose to an all-time high in August, with Services PMI at a record and manufacturing PMI touching an over 17-year high. The PMI survey also indicated stronger pricing power, with output charge inflation rising to an over 12-year high. Yet, beyond the PMI data, there is little evidence of a sharp revival in real in economic activity or rising inflationary pressures. The manufacturing sector continued to throw up mediocre numbers. The output of eight infrastructure industries grew a measly 2.0% on year in July.

Week in Numbers

Kharif sowing shows mixed trends 
As of August 18, Kharif sowing rose 3.7% year-on-year to 103.98 million hectares, led by a 9.8% jump in rice sowing to 39.86 million hectares. However, oilseed acreage fell 3.6% to 17.86 million hectares, raising concerns of continued pressure on edible oil prices.

Monsoon lifts reservoir level
Cumulative southwest monsoon rainfall up to August 22 reached 650.3 millimetres, 2.3% above the long-period average. Reservoir storage stood at 142.01 billion cubic metres as of August 21 - 7.6% higher than last year and 19.6% above normal –brightening prospects for rabi crop. 

Forex buffers improve
India’s foreign exchange reserves rose to $695.11 billion as of August 15, up $1.49 billion from the previous week and $26.78 billion so far in 2025-2026.

Bank credit growth edges past deposits 

Growth in bank loans overtook deposits for the first time since April, reflecting the impact of rate cuts by the Reserve Bank of India. Bank loans rose 10.2% on year as of August 8 compared with 10.1% growth in deposits.

Outward FDI slows
Outward equity foreign direct investment by Indian companies fell 22.2% year-on-year to $1.59 billion in July. However, total outward commitments, including loans and guarantees, rose 5.8% year-on-year to $3.51 billion.

India’s Flash PMIs at record highs 
India's private sector economy recorded its sharpest expansion since PMI surveys began in December 2005.  The Flash India Composite PMI rose to 65.2 in August from 61.1 in July. Manufacturing PMI hit 59.8, the highest since January 2008, while Services PMI touched a record 65.6.

Core sector growth remains weak
Output of the of eight core industries rose just 2.0% in July compared with 2.2% in June. Weak core sector activity is expected to weigh on overall industrial growth in July.

Unemployment rate declines 
Unemployment rate and persons aged 15 and above fell to 5.2% in July from 5.6% in June, according to the Periodic Labour Force Survey. For the 15-29 age group, unemployment rate eased to 14.9% from 15.3%.

Money supply expands steadily 
Broad money supply (M3) grew 9.6% year-on-year as of August 8, unchanged from a fortnight earlier. Currency with the public increased 8.8%, while demand deposits surged 16.9% and time deposits rose 8.8%.

Foreign liabilities of mutual funds rise
Foreign liabilities of mutual funds climbed 19.9% to $30.5 billion in March, while overseas assets declined 5.6% to $8.3 billion, according to a survey by the RBI.

Coming up

• Aug 28 – IIP for July
• Aug 29 — GDP for April–June
• Aug 29 - Government finances for April-July
• Sept 1 - HSBC India Manufacturing PMI for August
• Sept 1 - GST collections for August
• Sept 3  - HSBC Services & Composite PMI for August.

Tailpiece
All eyes are on the April-June GDP data, due Friday. The RBI projects first quarter growth at 6.5%. A print above that could buoy equities but pressure bond markets, as it would likely dampen hopes of another rate cut by the Reserve Bank of India.