India’s unemployment rate drops to four-month low in July as Covid-19 declines

Unemployment rate in India fell to the lowest level in four months in July, adding signs of a promising recovery in the economy where sales tax collections and demand for some commodities have indicated a rebound, Bloomberg reported.

According to latest data from Centre for Monitoring Indian Economy Pvt, the joblessness rate declined to 6.95% last month from 9.17% the previous month.

While the rural unemployment rate dropped to 6.3%, urban joblessness stayed above 8%, data based on surveys showed, which is widely accepted in the defection of timely government data.

The recovery of jobs is positive for the economy, where private consumption makes up to some 60% of gross domestic product, and is improving from an unprecedented recession last fiscal year.

In the financial year that began April 1, the International Monetary Fund sees India’s GDP growing 9.5%, the same pace forecasted by the country’s central bank, which has kept borrowing costs at a record low for more than a year to support growth.

Goods and services tax data released on Sunday showed that July collections rebounding back after a fall in June. India’s factory activity also witnessed a bounce last month amid easing of Covid-19 curbs, IHS Markit data showed on Monday.

(Inputs from Bloomberg)

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