India economic recovery to pick up pace in July – The month of June witnessed sequential recovery in economic activity with gradual reopening across regions. This is seen in some of the indicators like mobility and recovery in June e-way bills generated, from the lows seen in May. With infection rate staying low (positivity rate of 2.4%, June-end) despite the unlocking, we believe that the economic activity should return to levels seen in January as we progress through July. Although the same is not yet reflected in the Manufacturing and Services PMI numbers for June. Services PMI contracted and registered the fastest rate of reduction to 41.2 (vs. 46.4 in May). Manufacturing PMI came in at 48.1 in June, below 50 for the first time since July 2020 owing to intensification of the pandemic and its impact on demand. However, next month’s numbers are likely to move towards the neutral level.

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