Domestic consumption recovered mildly in Aug-23, after recording a sharp decline in Jul-23 (owing to a spike in CPI inflation), as measured by QuantEco Research’s proprietary TRUCE index

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Oct 26, 2023

QuantEco Research || TRUCE Index - After Jul-23 plunge, consumption recovers mildly in Aug-23

Urban consumption index rose to 0.62 in Aug-23 from 0.59 in Jul-23 (revised lower from 0.60) led by PV sales (at historic high) and Air passenger traffic. Rural consumption index too picked up moderately to 0.57 in Aug-23 from 0.55 in Jul-23. Upside in Agri exports and Two wheeler sales was supported by the sequential correction in annualised CPI inflation. Looking ahead, we remain more sanguine on rural consumption (amidst onset of Kharif harvest, rise in Rabi wheat MSPs, improvement in rural wages) vis-à-vis urban consumption (likely to feel the pinch of higher interest rates) especially due to continuing fiscal support directed towards agri/rural sectors ahead of key state and national elections.