Bank of America sees improving India growth indicators in July

Investing.com -- Bank of America reported that India's high frequency growth indicators showed strong momentum in June and July, despite ongoing global uncertainty.

Industrial production rose to 7.3% in June, marking a 23-month high, according to the bank's latest growth meter report. The first quarter of fiscal year 2027 averaged 5.7% growth compared to 3.9% in the fourth quarter of fiscal year 2026.

Manufacturing growth reached 7.8% year-over-year in June, while electricity generation climbed 10.6%. Auto sales for both two-wheelers and four-wheelers maintained solid performance during the period.

Foreign reserves increased to $682 billion in the third week of July, up $13 billion from June. The bank attributed the gain to strong Foreign Currency Non-Resident Bank account inflows totaling $40.2 billion.

Government capital expenditure remained at 24% year-over-year growth in the first quarter. Goods and Services Tax collections, excluding cess, grew 15.4% year-over-year in July.

Fuel consumption picked up in June alongside trade data normalization as geopolitical conflicts temporarily eased. Cargo traffic gained momentum, though air traffic growth slowed due to reduced flight schedules.

Both the Purchasing Managers' Index for services and manufacturing declined in July, with manufacturing slipping to approximately a five-year low. Selling prices increased while cost pressures fell to a five-month low, though transportation costs remained elevated.

Monsoon progress in July exceeded expectations, running 3% above normal levels. Bank of America stated that August progress will be important for both rural activity and inflation pressures.

The Reserve Bank of India's Monetary Policy Committee meeting is scheduled for Aug. 5.

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