New Delhi: Buoyed by rising output of intermediate goods and cooling commodity prices globally, India's business climate improved last month, says a report.
The 'BluFin Business Cycle Indicator (BCI)', which reflects various macroeconomic trends on a monthly basis, stood at 167.1 points in June, 5.6 percent higher compared to the same month last year, suggesting that the Indian economy is growing at a faster rate than the previous year.
The year-on-year growth rate noted in the previous month was at 5.8 percent.
Historically, the BCI has grown by an average of 7 percent year-on-year, financial information provider BluFin said today.
BCI has been indicating a reversal in the economic slowdown since July 2012 and projects the grow at 5.3 percent in the first quarter of financial year 2013-14.
"Intermediate sector continues to be a major contributor to BCI growth. Production data for aluminium, pig iron and copper indicate an expansion, as does a boost in infrastructural activities observed since late 2012... Data on consumer demand are also indicating a mild recovery," it said.
Also, falling international commodity prices such as those of copper, aluminium and gold have boosted the economy's
growth, even though a large part of the benefit has been eroded by the depreciating rupee.
"We expect economic growth to be on track despite the weakening currency. A systematic rise in FDI since early 2013 coupled with cooling international commodity prices and a comfortable foreign reserve would help mitigate some of this shock-related risk, which has more to do with sentiment than fundamentals," BluFin Vice President (Research and Development) Debopam Chaudhuri said.
Of late, the Indian currency has been consistently hitting new record lows and it slumped to a life-time low of Rs 60.76 (intra-day) against the US dollar on June 26. Since April 30, the rupee has depreciated by over 10 percent.
The index is based on components in four broad categories: capital market, foreign trade, policy and the real economy.
First Published: Thursday, July 4, 2013, 19:46