Page 4 - Policy Economic Report - November 2024

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

Executive Summary

According to IMF, growth in Asia and the Pacific remained robust in the first half of 2024. The growth
drivers differed in both cases: as in advanced Asia, activity was heavily reliant on exports, whereas in
emerging Asia, both domestic and external demand contributed to growth. In advanced Asia excluding
Japan, private consumption retreated, reflecting the impact of tight monetary conditions. Growth
received a welcome boost from manufacturing activity and exports, with strong demand from the United
States and emerging markets. In Japan, growth in the first half of 2024 disappointed amid domestic supply
disruptions, but real earnings have turned positive, and forward-looking indicators suggest that growth
will return to above potential.

As far as Indian economy is concerned, according to data released by the National Statistics Office on 29th
November, 2024, India's economic growth slowed to 5.4 per cent in Q2FY25, showing a significant decline
from 8.1 per cent during the same period last year. The country's growth projection was 6.7 per cent in
the first quarter of this financial year.

Real Gross Value Added (GVA), a core measure of economic activity, expanded by 5.6% in Q2 FY25, a
slowdown from 7.7% in the corresponding period last year. Nominal GVA growth also eased to 8.1%
compared to 9.3% in the same period last fiscal.

The agriculture and allied sector have bounced back by registering a growth rate of 3.5 per cent in Q2 of
FY25 after sub-optimal growth rates ranging from 0.4 per cent to 2.0 per cent, observed during previous
four quarters. Manufacturing grew at a sluggish 2.2%, while mining and quarrying contracted by 0.1%.
Sustained domestic steel consumption drove growth in the construction sector to 7.7% in Q2. The services
sector posted a robust 7.1% growth, with the trade, hotels, and transport segments registering 6.0%
growth.

Year-on-year inflation rate based on All India Consumer Price Index (CPI) for the month of October, 2024
is 6.21%. Corresponding inflation rates for rural and urban are 6.68% and 5.62%, respectively. Year-on-
year inflation rate based on All India Consumer Food Price Index (CFPI) number is 10.87% (Provisional) for
the month of October, 2024. As compared to with 9.24 % in September 2024 and 6.61 % in October 2023.
Corresponding inflation rate for rural and urban are 10.69% and 11.09%, respectively. The latest inflation
print of October 2024 is beyond the RBI’s upper tolerance limit of 6 per cent.

The HSBC Flash India Composite Output Index – a seasonally adjusted index that measures the month on-
month change in the combined output of India's manufacturing and service sectors – rose from a final
reading of 59.1 in October 2024 to 59.5 in November 2024, indicating a sharp rate of expansion that was
the strongest in three months and above its long-run average. Growth ticked lower in the manufacturing
industry whilst picking up in services, although the former outperformed again.

On the external front, India's forex reserves stand at $ 657.89 billion as of 15th November, 2024 according
to RBI. According to the Weekly Statistical Supplement released by the RBI, foreign currency assets (FCAs)
fell by $15.5 billion to $569.84 billion. Gold reserves decreased by $2 billion, bringing the total down to
$65.7 billion. The Special Drawing Rights (SDRs) dipped by $94 million, now totaling $18 billion, while the

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