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

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.

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.

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.

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.

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.

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.