Macro Watch
Update on Data Trends | September 2022
Macro Heat Map
*Data available as on Aug’22
Retail inflation slips back to 7%, 100 bps above RBI’s upper tolerance. Monetary Policy Committee will remain compelled to continue raising policy rates.
- CPI-based retail inflation grew 7% in Aug’22, compared to 6.7% in the previous month. The rise is mainly on account of food inflation, which grew 7.5% from 6.7% the month before. Current CPI levels are a full percentage point above the central bank’s upper tolerance limit, suggesting further lending rate hikes.
- Led by sticky inflation levels in FY23, MPC raised policy repo rate by 140 basis points so far. Recovering economic activity and increased government spending however led to stronger credit offtake, despite higher rates. Non-food credit for the month of June witnessed a growth of 12.76% in comparison to the same month last year.
- Foreign Portfolio Investors (FPIs) are showing renewed interest in India’s capital markets as equity and debt prices remain buoyant. FPI inflows in August stood at Rs. 56,521 crores, witnessing a month-on-month growth of 96%. Although the rupee depreciated in comparison to last month, return of FPI’s along with the RBI’s measures are expected to lend further support to the rupee.
Industrial Activity
- Manufacturing output, having the highest weighted share in the overall index of industrial production, suffered a sharp decline, recording a growth rate of 3.2% in July from 12.95% the month before.
- End-user industries like automobiles, clothing and beverages witnessed higher growth as compared to intermediate goods.
Credit Rating Optimism Index
- From its peak in May’22, IIP has witnessed a sharp decline in July with IIP manufacturing growing at a mere 3.2%, compared to 12.9% in Jun’22
- An uptick in the credit rating optimism index for the month of August suggests some expected improvements in manufacturing activity. However, risks owing to a subdued global demand on account of recession fears might push the manufacturing output down further.
For August 2022, the consumer confidence survey, conducted by OECD, dropped to 93 and 96 for U.S and U.K respectively. A score below 100 indicates pessimism about the general economic situation, unemployment and capability of savings.
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:
Debopam Chaudhuri, Head of Research and Ratings
Ria Rattanpal, Research Associate
Komal Chavan, Marketing Associate
91-9819239926, dc@truboardpartners.com
Author: Debopam Chaudhuri
Head of Research and Ratings
+91-9819239926
dc@truboardpartners.com
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.