India’s economic momentum eases in August as autos, fuel demand lose pace: Moneycontrol Eco Pulse

According to fresh market updates, India’s economic momentum moderated in August as automobile sales and fuel consumption lost pace, even as services, hiring, electricity demand and financial activity provided backing, according to the Moneycontrol Eco Pulse.

The Moneycontrol Eco Pulse Index eased to 54.9 in August from 56 in July, but remained comfortably above the 50 mark, indicating that economic activity continued to expand despite a loss of momentum during the month.

The moderation was particularly visible across consumption-linked indicators. Expansion in four-wheeler sales slowed to 17.7 percent year-on-year in August from 27.1 percent in July, while two-wheeler sales expansion eased to 20.1 percent from 34.5 percent. Tractor sales registered the sharpest loss of momentum, with expansion slowing to 2.1 percent from 36.9 percent in the previous month. Three-wheeler registrations additionally moderated, although expansion remained elevated at 47.2 percent. Consumption loses some steam

Fuel consumption additionally pointed to softer mobility demand.

Petrol consumption expansion eased to 8.2 percent in August from 9.2 percent in July, while diesel consumption slowed to 6.8 percent from 9.9 percent. Aviation turbine fuel was an exception, returning to expansion of 2.3 percent after contracting in July.

The Services PMI rose to 54.1 in August from 53.3 in July, offsetting part of the softness in manufacturing, where PMI eased to 52.8 from 53.5. The composite PMI remained unchanged at 54.3, indicating that overall private-sector activity continued to expand.

Hiring indicators additionally improved sharply. Expansion in the Naukri JobSpeak Index accelerated to 13.7 percent from 5 percent in July, suggesting stronger white-collar recruitment activity.

Electricity, credit and payments stay resilient

Other high-frequency indicators provided a more encouraging signal.

Electricity demand expansion accelerated to 12.8 percent in August from 9.8 percent in July, while e-way bill generation strengthened to 7.7 percent from 6 percent, suggesting continued movement of goods across the economy.

Financial indicators were additionally supportive. Non-food credit expansion edged up to 19.8 percent from 19.1 percent, while aggregate deposits accelerated to 17.6 percent from 15.4 percent.

Digital payments remained resilient, with UPI transaction expansion increasing to 22.5 percent from 21.5 percent. Expansion in credit card payments additionally accelerated sharply to 8.5 percent from 3.6 percent.

From acceleration to moderation

The August reading suggests that the economy stays firmly in expansion, but momentum has become less broad-based.

After strengthening through the previous months, consumption-linked indicators are beginning to normalise, while services and financial activity are playing a larger role in sustaining overall momentum.