India's Economy Signals Resilience Even As Exports Dim Outlook

Liquidity in the banking system swung to a surplus in March, while credit growth moderated to 15%, from 15.52% in February, central bank data showed.

India's economic activity stayed resilient in March though the weakening pace of exports and an increase in unemployment dimmed the outlook for the country that's surpassing China as the most populous nation.

While the needle on a dial measuring the so-called Animal Spirits was unchanged at 5 for a third straight month, a jump in collections from taxes levied on consumption showed Asia's third-largest economy was ticking along. That's the reading from the overall activity tracker comprising of eight high-frequency indicators compiled by Bloomberg.

The readings come in the backdrop of the Reserve Bank of India pausing rates for the first time since May to evaluate the impact of 250 basis points in rate increases so far and to support growth. Retail and wholesale price-gains have eased on still-elevated rates, spurring calls for a longer pause.

Last week, Finance Minister Nirmala Sitharaman said her government was making "enough efforts" to ensure the economy stays buoyant though she expressed concern over the OPEC+ output cut and impact of decisions related to Russia's war in Ukraine. Weakness in demand for manufacturing goods and services activity could be a drag on India's recovery, she added.