India’s Economic Performance Review for August 2022

India’s economic performance continues to show mixed trends, indicating growth momentum in some high frequency indicators but mild to negative signals in select indicators. Backed by gains in demand recovery, robust agriculture performance, a pickup in manufacturing and services activities, and an increase in investment, India’s economic performance for the first quarter of FY2022-23 (April-June 2022) was impressive at 13.5%. That said, high inflation and the swelling trade deficit continue to impact the demand-supply balance and remain causes of concern among policymakers. India’s central bank, the Reserve Bank of India (RBI), has responded to the concerns by raising the repo interest rates 140 basis points since May 2022, to 5.4%, and is expected to continue tightening in coming months.