{"id":377917,"date":"2024-05-08T16:01:18","date_gmt":"2024-05-08T10:31:18","guid":{"rendered":"https:\/\/zerodha.com\/z-connect\/?p=377917"},"modified":"2024-05-15T14:07:37","modified_gmt":"2024-05-15T08:37:37","slug":"its-the-economy-stupid-summer-high-frequency-indicators","status":"publish","type":"post","link":"https:\/\/zerodha.com\/z-connect\/subtext\/its-the-economy-stupid-summer-high-frequency-indicators","title":{"rendered":"It\u2019s the economy, stupid! Summer high (frequency indicators)"},"content":{"rendered":"

We love India Data Hub\u2019s weekly newsletter, \u2018This Week in Data<\/a>\u2019, which neatly wraps up all major macro data stories for the week. We love it so much, in fact, that we\u2019ve taken it upon ourselves to create a simple, digestible version of their newsletter for those of you that don\u2019t like econ-speak. Think of us as a cover band, reproducing their ideas in our own style. Attribute all insights, here, to India Data Hub. All mistakes, of course, are our own.<\/em><\/p>\n

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May brings with it a raft of high frequency indicators to dig through. What\u2019s that, you ask? We described them a couple of months ago<\/a>:<\/p>\n

\u201cThose are little bits of information on the economy that we can gather regularly and quickly.<\/em><\/span><\/p>\n

Think about it: nobody really understands how an economy is doing. Economies are impossible to grasp. They\u2019re made of billions of transactions \u2013 people buying coffee, or filling petrol in their bikes, or picking up a copy of the day\u2019s newspaper \u2013 each thing, each day, for each person and each business, taken together. If you really want to understand an economy, first, you must know every last thing that happens in the country.<\/span><\/em><\/p>\n

The best we can do is look at proxies. We take the small trickle of data-points we can get \u2013 the \u2018high frequency indicators\u2019 \u2013 and use them to make whatever conclusions we can. They\u2019re not perfect, but they give us a crude, low-resolution picture of the country\u2019s economic activity.<\/em>\u201d<\/span><\/p>\n

We\u2019re doing a routine full-body check-up for the economy, if you may. Strap in.<\/p>\n

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GST collections stay steady<\/h3>\n

We\u2019ll begin with GST collections. Why do they matter? We went over this back in February<\/a>:<\/p>\n

\u201cThe Indian government charges a Goods and Services Tax, or GST, on most transactions for goods or services in the country. GST collections, as a result, are a fraction of all the money that changes hands across the economy. Now, it\u2019s not a perfect proxy. There is lots of economic activity that this doesn\u2019t catch. Even so, GST collections do give you a rough picture of the trade taking place in the country.\u201d<\/em><\/span><\/p>\n

GST collections for April were up by 13%, from April last year. Average out the growth in GST collections for the six months that came before this, and they come to 13% as well. A pretty routine month, all in all.<\/p>\n

As an aside:<\/em> A month\u2019s GST bills are due by the 20th of the next month. April\u2019s numbers, therefore, tell us about March\u2019s economy, by and large.<\/p>\n

\"\"<\/a><\/p>\n

There\u2019s a spot of nuance here.<\/p>\n

Though our GST collections as a whole grew at a robust 13%, collections on imports<\/em> are only growing in the single digits. This mirrors the paltry growth we\u2019re seeing in merchandise imports, which are stuck around the ~3% mark.<\/p>\n

What does that tell us? While the GST captures a steady uptick in business activity, most of that is domestic. Our trade with the rest of the world, alas, is seeing less exciting times.<\/p>\n

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Vehicle sales vary<\/h3>\n

Next, automobiles. We\u2019d written about their importance of the indicator back in March<\/a>:<\/p>\n

\u201cPeople always need vehicles. But vehicles are huge purchases, not made on a whim. People buy them when they have money to spare and feel confident that things look good in the foreseeable future. As a whole, then, Indian automobile sales tell us how good Indians feel about their economic prospects.\u201d<\/em><\/span><\/p>\n

This time around, though, it\u2019s hard to say what people\u2019s vehicle purchases say about their mental state.<\/p>\n

On one hand, there\u2019s been a definite uptick in the sale of personal vehicles:<\/p>\n