Demand continues to grow steadily, bumper kharif harvest expected to lower food inflation

Amid a mixed global economic background, India quietly holds its ground, according to a latest monthly update from the Finance Ministry. After a brief moderation over the monsoon months, economic activity firmed up in October. Demand continues to grow steadily as indicated by improving FMCG sales volumes in Q2 FY25 in both urban and rural areas. Rural demand has been particularly striking as reflected in the robust growth of two-wheeler sales and record-high tractor sales in October 2024. On the supply side, the Purchasing Managers' Index for manufacturing and services indicated strong activity in the secondary and tertiary sectors.