Macro Watch
Update on Data Trends | October 2022
Macro Heat Map
Soaring CPI levels and a faltering IIP
CPI Highlights:
- Inflation, as measured by the CPI, rose 7.4% on-year in September from 7% in August, led by food and beverage inflation which rose the highest, from 7.6% in August to 8.4% in September.
- Fuel inflation moderated to 10.4% in September from 10.8% the month before, owing to easing crude oil prices (90.6 USD/Barrel in September from 98 USD/Barrel in August).
IIP Highlights:
Industrial output, as measured by the IIP, declined 0.8% on-year in August, compared to a 2.2% growth in July.
This decline was led by a contraction in output of the mining and manufacturing sector, with manufacturing output declining 0.7% in August from a growth of 3% observed in July. During the same period, IIP Mining declined 3.9% on-year in August, compared to a 3.3% decline in July.
Credit growth
Non-food credit recorded double-digit growth for the fourth straight month, rising 13.9% in July’22. Credit growth is likely to remain elevated in the short term due to the ongoing festival season.
Foreign Exchange Markets
INR has depreciated 10% (year-to-date) in comparison to USD. The rate of depreciation, however, is lower than in other emerging and developed markets. During the same period, the Chinese Yuan and South African Rand have depreciated by 13% and 14% respectively, while Euro and British Pound have depreciated by 15% and 19%.
Industrial Activity
Manufacturing output declined to an 18-month low to 0.7% in August, compared to a growth of 3% in July. Within manufacturing, export-oriented sectors like pharmaceuticals and textiles witnessed a decline of 9.2% and 8.1% respectively.
A slowdown in U.S, European Union and China has led to a decline in manufacture of textiles and pharma products, caused by a decreasing demand from these countries.
Credit Rating Optimism Index
- From a growth of 11% witnessed a year ago, manufacturing output declined 0.7% in August’22.
- Falling levels of optimism of major credit rating agencies is a major concern for growth in industrial
activity. For industrial output to revive, it is imperative for consumption (both domestic and global) to pick
up. Major threats to this include rising inflation and slowdown in global growth.
TruQuest is knowledge series launched by TruBoard Partners providing succinct updates and views on:
- Liquidity outlook
- India’s macro economic view
- Trends within the infrastructure, Real Estate and Renewable Energy sectors
- Impact analysis of new regulations and policies on lending and capital flow
Team:
Nandkumar Surti, Cofounder
Ria Rattanpal, Research Associate
Komal Chavan, Marketing Associate
Team:
Nandkumar Surti, Cofounder
Ria Rattanpal, Research Associate
Komal Chavan, Marketing Associate
Disclaimer
The data and analysis covered in this report of TruQuest has been compiled by TruBoard Pvt Ltd and its associates (TruBoard) based upon information available to the public and sources believed to be reliable. Though utmost care has been taken to ensure its accuracy, no representation or warranty, express or implied is made that it is accurate or complete. TruBoard has reviewed the data, so far as it includes current or historical information which is believed to be reliable, although its accuracy and completeness cannot be guaranteed. Information in certain instances consists of compilations and/or estimates representing TruBoard’s opinion based on statistical procedures, as TruBoard deems appropriate. Sources of information are not always under the control of TruBoard. TruBoard accepts no liability and will not be liable for any loss of damage arising directly or indirectly (including special, incidental, consequential, punitive or exemplary) from use of this data, howsoever arising, and including any loss, damage or expense arising from, but not limited to any defect, error, imperfection, fault, mistake or inaccuracy with this document, its content.