This economic indicator contracted 5.6% in July; respite unlikely in August either

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This economic indicator contracted 5.6% in July; respite unlikely in August either

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India's Economic Activity Index (EAI) for real Gross Value Added, known as EAI-GVA, contracted 5.6 per cent YoY in July - marking fifth consecutive month of decline.

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EAI-GDP index also contracted 5.9 per cent YoY in July, worse than the 3.3 per cent decline a month ago. Muted growth in government consumption and sluggish decline in imports led to faster contraction in EAI-GDP in July.

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Real private consumption expenditure index declined 7.6 per cent YoY, following the 9 per cent fall in the previous month. Along with government consumption, total consumption declined 5.4 per cent YoY in July, as against 4.8 per cent decline in June.

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Investments also shrank by 21.5 per cent, marking the slowest contraction in the past five months. While most indicators showed month-on-month improvement, government investments, diesel sales and construction activities deteriorated.

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Decline in industrial activities was a tad slower. Industrial activities contracted slightly slower than a month before. It fell by 14.2 per cent in July 2020 on a YoY basis. It fell almost 15 per cent in the previous month.

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Services sector fell 4.3 per cent in July as against 4 per cent in June. Although farm activities posted double-digit growth for the second successive month, the services sector declined marginally faster than in June.

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Few indicators available for August - power generation and e-way registrations - also hint towards the continuing decline in economic activity. E-way bill generation dropped by 8 per cent and 7.4 per cent in July and August, respectively.
Story: Shivani Sharma
Design: Pragati Srivastava