Let's summarise the state of the economy: 1. Given the difficulties of the gross domestic product (GDP) data, it's useful to look at the firm data to understand the state of the economy. There is a small dataset of 508 non-financial firms where the full-year results of 2023-24 are observed; this shows revenue growth of 4.46 per cent nominal.
Turning to the quarterly revenue data for the listed firms, there are three quarters with ample data (September 2023, December 2023, and March 2024) and where revenue growth was -0.9 per cent, 2.1 per cent, and 5.0 per cent nominal. There is a small dataset of 176 firms with the data for the June 2024 quarter, and the growth rate seen there was 4.3 per cent nominal.
2. In the inflation data, there were brief peaks in headline inflation (year-on-year consumer price index growth) of about 7 per cent in 2022 and 2023. From the middle of 2023 onwards, the headline inflation rate has declined and fallen within the range required in the target range specified in the Reserve Bank of India Act of 4-6 per cent. In the seasonally adjusted core inflation data, there has been a deceleration from 2022 to 2024. When the inflation rate decelerates and nominal interest rates hold still, real interest rates go up.
Debt dynamics in many firms have become adverse (in what is termed an "r-g problem") where the top line has grown (with values like 4.3 per cent, 0.9 per cent, 2.1 per cent, 5 per cent, 4.3 per cent) at values below the cost of borrowing. Numerous Indian firms have responded to the difficulties of 2011-24 by y? reducing leverage, and for them, this issue is not relevant. But there is a class of firms with debt where this dynamic weighs on the mind.
Denne historien er fra July 22, 2024-utgaven av Business Standard.
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Denne historien er fra July 22, 2024-utgaven av Business Standard.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
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