Our August 2024 edition of Peripheral Vision highlights three crucial developments:
- India experienced a notable reduction in inflation rates in July, primarily due to a sharp drop in food prices. Retail inflation decreased to a 59-month low of 3.54%, while wholesale inflation fell to a three-month low of 2.04%.
- Conversely, core sector growth slowed in June, with most sectors declining, excluding coal, fertilisers, and cement.
- On a positive note, the Indian startup ecosystem saw its highest funding in three years in July 2024 despite a decrease from the previous month.
In July 2024, India witnessed a decrease in consumer inflation, which fell to 3.54% from 5.08% in June 2024 and 7.44% in July 2023, marking the lowest inflation rate in 59 months. Falling vegetable prices and a high base effect drove this decrease.
Similarly, India's wholesale inflation, as measured by the Wholesale Price Index (WPI), dropped to a 3-month low of 2.04% in July, down from a 16-month high of 3.36% in June, primarily due to a sharp decline in food prices.
India's core sector growth also faced a slowdown, falling to a 20-month low of 4% in June 2024 from 6.4% in May. The slowdown stemmed from weaker performance in most sectors, except coal, fertilisers, and cement. Coal grew by 14.8% due to summer demand.
In the start-up funding landscape, July 2024 decreased to $1.03 billion from $1.94 billion in June 2024. Despite this decline, July still recorded the highest funding amount in the past three years. The June surge was propelled by Zepto's substantial $665 million funding round, alongside significant investments in Flipkart, PharmEasy, and Lenskart. Indian startups have attracted $8 billion in funding during the first seven months of 2024.
The economic data reveals a mixed yet positive trend, showcasing notable improvements in the inflation rate and start-up funding despite a slowdown in core sector growth. These developments offer a nuanced view of India's economic landscape and set the stage for adaptation in business strategies.
Stay abreast of macro trends using #PeripheralVision, Kanvic's interactive dashboard designed to help C-level executives detect subtle signals and adjust strategies to emerging market realities.
