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World Economy

OPEC Monthly Oil Market Report – October 2017


Graph 3 - 23: Indian industrial production

Graph 3 - 24: Indian PMIs

September saw a sustained expansion in the Indian manufacturing sector, supported by increases in both

output and new orders. The

Nikkei Manufacturing PMI

in India came in at 51.2 in September, the same as

in August. While output and new order growth remained weak in the context of historical survey data,

employment grew the most since October 2012 and confidence strengthened. Meantime, new export orders

declined for the first time in four months. The introduction of the GST, as well as greater prices for steel and

petroleum products, reportedly caused cost pressures to increase during September.

The Nikkei Services PMI

in India jumped to 50.7 in September from 47.5 in the preceding month. It was the

first expansion of the services sector since June as the sector in July was impacted by the introduction of the

GST. Output and new orders increased for the first time in 3Q17 while employment grew the most since

June 2011. Output and new orders increased for the first time in 3Q17 while employment grew the most

since June 2011. In the meantime, business sentiment softened to a three-month low, mirroring the trend

observed for the private sector. Input cost inflation accelerated, which panellists linked with higher prices for

fuel, stationary items and vegetables.

India’s GDP growth

remained unchanged at 6.9% in 2017 and 7.5% in 2018.


China’s GDP growth

expectation was kept unchanged at 6.7% in 2017 and 6.3% for 2018. It seems China’s

economy is in better shape than the same period last year. Output by both the industrial and service sectors

is growing at a faster rate than in 2016. Exports have turned from contraction last year to expansion this

year. Consumer demand has remained stable. Corporate profits have also improved. While cyclical

economic growth is unlikely to decelerate in the near term, government-supported growth is unsustainable

over the long-term.

Despite softening growth in July and August, China’s economy still carries sufficient momentum. Economic

activities so far this year improved from the same period in 2016. Industrial output in January to August this

year grew 0.7% faster than the same period a year ago, while the service sector output grew 0.2% more.

Exports rebounded significantly this year, swinging from a 8.4% contraction in January–August 2016 to a

7.6% expansion in the first eight months of 2017. Corporate profits also improved noticeably, rising 22.0% in

the first seven months of this year, compared with 6.2% a year earlier.

However economic activities decelerated across the demand side. Nominal fixed investment growth fell from

8.3% y-o-y through July to 7.8% y-o-y through August. Retail sales in August increased 10.1% y-o-y, down

from 10.4% y-o-y in July. Goods exports rose 5.5% y-o-y in August, 1.3% lower than the July rate.





Jul 16

Aug 16

Sep 16

Oct 16

Nov 16

Dec 16

Jan 17

Feb 17

Mar 17

Apr 17

May 17

Jun 17

Jul 17

Total IP Manufacturing IP Food products IP

Sources: Central Statistical Organisation of India and

Haver Analytics.

% change y-o-y











Sep 16

Oct 16

Nov 16

Dec 16

Jan 17

Feb 17

Mar 17

Apr 17

May 17

Jun 17

Jul 17

Aug 17

Sep 17



Services business activity


Sources: Nikkei, IHS Markit and Haver Analytics.