Despite inflationary challenges, PHDCCI Economy GPS Index grows 10% (Y-O-Y) in August 2023 

PR No – 455

13th September, 2023

New Delhi

Despite inflationary challenges, PHDCCI Economy GPS Index grows 10% (Y-O-Y) in August 2023 

Despite the inflationary pressures vis-à-vis escalation in vegetable prices and supply disruptions, the economic activity performs robust in August 2023; the PHDCCI Economy GPS Index for August 2023 went up at 155.1 from 141.0 in August 2022 with an increase of 10% on the Y-O-Y basis, said Mr. Saket Dalmia, President, PHD Chamber of Commerce and Industry.

PHDCCI Economy GPS Index captures the momentum in supply side business activity through growth in GST collections, demand side consumer behaviour through volume growth in passenger vehicle sales and sensitivity of policy reforms and impact of domestic and international economic and business environment through the movement of SENSEX at the base year of 2018-19=100, said the Industry Body.

Demand trajectory in the economy remains intact as passenger vehicles, with compact cars and utility vehicles grew around 9.4% Y-o-Y at 346798 in August 2023 from 317000 in August 2022. Supply side indicator, the gross GST revenue collections grew 11% Y-o-Y at Rs. 1,59,069 crore in August 2023 as compared with Rs. 1,43,612 crore in August 2022.

Economic recovery so far (Y-o-Y)

Source: PHD Research Bureau, PHD Chamber of commerce and Industry

Economic recovery so far (Sequential)

Source: PHD Research Bureau, PHD Chamber of commerce and Industry

PHDCCI Economy GPS Index has consistently remained above 140 levels since August 2022 which shows a positive momentum for the economic activity.

The inflationary pressure is expected to soften in the coming months; the significant fall in the prices of vegetables in the month of August 2023 has softened the inflation from 7.4% in July 2023 to 6.8% in August 2023. As monsoon behavior has stabilised significantly and supply disruptions have diminished, the inflation trajectory is expected to soften further in the coming months, said Mr. Dalmia.

Source: PHD Research Bureau, PHDCCI Economy GPS Index.

PHD Chamber of Commerce and Industry (PHDCCI) Economy GPS Index is a composite index of 3 lead economic and business indicators with base year at 2018-19=100, which measures the broad economic and business activity. The PHDCCI Economy GPS Index, based on the monthly values of three high frequency indicators viz., GST collection (Rs. Crore), Passenger Vehicle Sales (units) and SENSEX (daily average), helps to find the direction of the economy. The three broad indicators represent not only demand and supply in the economy but also revenue growth of the government and movement of financial markets in the country. GST collections indicate the momentum of business activity, passenger vehicle sales is a broad indicator of demand activity in the economy and movement of SENSEX indicates the mood of both domestic and foreign investors.

Table : Movement of Economy GPS over the months

Source: PHD Research Bureau, PHD Chamber of commerce and Industry