Top macro indicators to gauge economic recovery!

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The COVID – 19 pandemic led lockdown has taken a huge toll on the Indian economy. However, easing restrictions and gradual reopening of the economy has increased hopes of economic recovery. Therefore, in this article, we discuss some of the macroeconomic indicators which one should look at that will help gauge the recovery in the economy. We have also provided the link on where you can find the latest data. 

The first indicator is the Consumer Price Index (CPI) or Inflation

Inflation is one of the most crucial indicators as it measures the change in the retail price of essential goods in services. Higher inflation is not a good sign for any economy, and therefore, this data helps the government and RBI to formulate a policy response to keep the inflation in check. Inflation has cooled-off over the last four months and the expectations are of a further decline in the coming months due to deflationary pressure.  

Date of release: Mid of every month (Next data June 12, 2020) 

Where to find: Here is the link.

Index for Industrial Production

This index provides details on the growth of manufacturing activity in different sectors of the economy. There are three broad categories of IIP namely Mining, Manufacturing and Electricity. The data is released every month (but with a lag of six weeks) and is widely used by RBI and government to gauge the health of our manufacturing economy. The IIP has witnessed a sharp contraction for March (-16.7%) and April is expected to be even worse. Therefore, coming months data would hold great importance to assess the recovery in India’s manufacturing. 

Date of release: Mid of every month (Next data June 12, 2020)

Where to find: Here is the link.

India’s foreign trade

India is a net importing country and runs a trade deficit. The COVID – 19 has led to a sharp fall in imports but even the exports have taken a hit. The continued rise in trade deficit is not a good sign for an emerging economy like India as it would lead to currency depreciation and higher inflation. The data is released every month by the Ministry of Commerce and Industry.

Date of release: Mid of every month (Usually on the 15th)

Where to find: Here is the link.

GST collection 

Government’s tax collection has gone for a ride recently due to nationwide lockdown. Going forward, the GST collection numbers every month would be extremely crucial for the government’s finances. Here is the link.

Purchasing Manager’s Index (manufacturing and service)

IHS Markit is one of the leading sources of critical information in the economy which releases PMI data for several countries including India. PMI for manufacturing (and services) incorporates survey results conducted on manufacturing (and services) firms throughout the country. A reading above 50 indicates expansion and below 50 indicates contraction.

Frequency – At the start of every month

Where to find – Here is the link

Bank Credit/Deposit Growth

The RBI releases data every fortnight that gives us a sense of overall deposit as well as credit growth for all scheduled banks. This is one of the leading indicators to ascertain whether the economy is recovering. The credit growth had slowed to 6.3% in the last data announced by the RBI. Any recovery in the growth would be crucial for economic revival.

Frequency – Fortnightly

Where to find? – Scheduled Bank’s Statement of Position in India


India’s dependence on monsoon is not hidden from anyone. India receives nearly 75% of its rainfall between June – September. The IMD has forecasted a normal monsoon this year, however, the progress and intensity of the monsoon would be extremely important for our agrarian driven economy. The IMD releases a daily update on the monsoon progress. Here is where you can track it.

India’s Domestic Air Traffic 

The DGCA releases data on Domestic air traffic every month. Rising air traffic in India is a sign of rising income levels in the economy. Given the current pandemic, it would be important to see how long it takes for the domestic traffic to return to normalcy. Here is the link. (The website is not updated since March, we believe it would be due to the pandemic, we will update if there is any change in the source).

Monetary Policy Meet

The Central Bank (RBI) holds a monetary policy meeting with its members to decide upon the key policy rates in the economy. Some of them include REPO, Reverse REPO, CRR rates. The cut in REPO and Reverse REPO is normally positive for the economy, as it leads to lower interest rates which can lead to higher credit offtake and boost the economy. The monetary policy committee decides the rates taking into account both the inflation as well as growth in the economy. The MPC meet is held once every two months however, it can be preponed if required (like how RBI MPC met recently during the pandemic). The last policy was on May 22, 2020, wherein the RBI cut REPO rates by 40bps and the upcoming data on inflation and growth would decide the rate trajectory. 

GDP Growth

The GDP data is the final measure of economic health and the growth rate is an important indicator of the country’s economic progress. The government releases data every quarter and comes nearly with a 60-day lag. This is a lagging indicator as it tells us what has already happened.  

Frequency – Every quarter

Where to find – Here is the link

The Centre for Monitoring Indian Economy is one of India’s leading business information company that produces economic and business databases. Although CMIE subscription is a paid service, their website has several high-frequency indicators. To give one example, the government does not publish data on unemployment and therefore news reports and other experts’ uses CMIE data. Here is the link

Apart from this, there are several other indicators like auto sales data (1st of every month), telecom subscription data, central government finances etc.

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