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India’s economy maintained its momentum in April as a wider reopening from the pandemic kept rising prices from depressing demand for the time being.

Activity in the services sector as well as factories gained last month, while the three-month weighted averages of monthly changes in indicators from exports to credit demand suggested enduring strength. That helped keep the needle on a dial measuring so-called ‘Animal Spirits’ steady at 5 for the 10th straight month.

Reserve Bank of India Governor Shaktikanta Das, who is due to lead a meeting of the policy panel next month, has signaled more tightening to keep inflation from denting household spending power.

Below are details of the dashboard. (For an alternative gauge of growth trends, follow Bloomberg Economics’ monthly GDP tracker -- a weighted index of 11 indicators.)

Business Activity

Purchasing managers’ surveys showed services sector activity in April grew at this year’s strongest pace, while manufacturing also showed expansion. That helped the S&P Global India Composite PMI expand at the fastest pace in five months to 57.6 -- far above the 50 threshold that separates growth from contraction.

The activity backed by stronger new orders was accompanied by a bump in output prices as producers started passing on high raw material costs to consumers. That’s a risk to headline inflation, which climbed to an eight-year high in April.

Exports grew at this year’s fastest pace, rising 30.7% in April from a year ago to $40.2 billion, although in value terms that was lower than the $42.2 billion seen a month prior. Imports also rose 31% to $60.3 billion as high commodities prices pushed up the bill for everything from crude to edible oils. That widened the trade deficit to $20.1 billion from $18.5 billion in March.

The automobile sector continued to be weighed down by a global supply crunch, with passenger vehicle sales falling 10% in April from a month ago. The auto industry sees rate increases dampening consumer sentiment.

Other indicators of consumer activity were encouraging though, with bank credit growing 11.1% toward the end of last month from 9.6% in end-March. Liquidity conditions continued to remain in surplus.

Factory output growth picked up, rising 1.9% in March from 1.5% in the previous month, aided by electricity and mining. The output growth of eight infrastructure industries slowed to 4.3% from 6% in February as coal and crude oil output fell from a year ago. Both the reports are published with a one-month lag.

India does not plan to curb rice exports as the world's biggest exporter of the staple has sufficient stocks and local rates are lower than state-set support prices, trade and government sources said.

India banned wheat exports on May 14, just days after New Delhi forecast record shipments of 10 million tonnes this year, as a heat wave hit output and sent domestic prices to record highs.

"We have more than sufficient stocks of rice and there is no concern at all in terms of either prices or availability for exports and domestic requirements," said a senior government official involved in the decision making.

"At this stage, there is no consideration at all to prohibit rice exports," said the source, who didn't wish to be named in line with official rules.

Rice exports from India, also the world's second biggest consumer of the grain, jumped to a record 21.2 million tonnes in the fiscal year to March 2022 from 17.8 million tonnes the previous year.

Rice prices are falling, even as exports rise, as India has massive stocks and local purchases by the Food Corporation of India (FCI) - the state stockpiler - are increasing, said B.V. Krishna Rao, president of the All India Rice Exporters Association.

Milled and rice paddy stocks at FCI totalled 66.22 million tonnes against a target of 13.58 million tonnes.

"There is no need to put any restriction on rice exports," Rao said. "Wheat output and prices were affected due to the war in Ukraine, but ... the Black Sea region is neither a major producer nor consumer of rice."

India's rice export prices extended losses this week to touch $350 to $354 a tonne, the lowest in more than five years.

In the crop year to June 2022, India's rice output jumped to a record 129.66 million tonnes from 121.1 million tonnes the previous year.

Higher output has forced FCI to buy more rice from domestic farmers, taking a record 80.4 million tonnes of rice paddy from growers so far this year against 77 million tonnes over the same period last year.

"FCI's procurement is going up, and that is an indication that there's no shortage, so there is no logic for any ban on rice exports," Rao said.