iifl-logo

Invest wise with Expert advice

By continuing, I accept the T&C and agree to receive communication on Whatsapp

sidebar image

Indian Economy: Monthly Macro Dashboard

22 Mar 2024 , 11:04 AM

According to Jan/Feb HFI data: 1) Industrial data (steel, coal, cement, IIP) show some weakness (except for electricity & railway freight), but consumption data (vehicle sales, GST) strong (except for struggling air traffic growth). 2) Rural trends show continued weakness in tractor & fertiliser sales, rise in unemployment & MNREGA jobs provided. 3) FII debt flows strong since the past 4-5 months ($10bn cumulative), underscoring renewed interest in India bonds post sovereign bond inclusion. 4) CG capex down in Jan, but 10MFY24 tracking in line with FY24RE; revex also continues to contract and 10MFY24 tracking below FY24RE. SG capex shows a strong 36%YoY growth in FY24YTD. 5) Commodities show signs of pickup recently. 6) Global bond yields stable post the rise seen in Feb, with Fed’s dot plot maintaining three cuts.

  • Industrial activity remains weak in Jan, PMIs remain strong – Steel production moderates to 7%YoY in Jan v/s 7.6% in Dec. Coal production growth has moderated down to around 10% in the last few months from a strong double-digit growth in prior months. Cement production growth picked by slightly and grew at 5.6% in Jan. Electricity consumption growth stayed strong at 8.4% in Feb vs 6.1% in Jan. Bitumen consumption slowed down to 3.7% in Feb, after witnessing strong growth in the past few months. IIP grew by 3.8% in Jan v/s 4.2% in Dec. However, IIP of durable consumer goods grew strongly at 11% in Jan, although on a weak base. Both Mfg. & Services PMI are strong at 57 & 61 respectively in Feb.
  • Railway freight traffic sees robust growth– Railway freight traffic in Feb witnessed a strong growth of 10.1% YoY v/s 6.4% in Jan. Port cargo traffic growth slowed down to 2.2%YoY in Feb v/s 3.3%YoY in Jan. Port container traffic grew at 10.9%YoY in Feb after contracting 4.3% in Jan.
  • Consumption trends strong except for air traffic, GST collections rise – Retail PV sales grew 11.3%YoY vs 12.9% in Jan, while 2Ws grew 13.2%YoY vs 14.9% in Jan. Air traffic growth remained constant at 4.8% YoY in Feb against 4.6% in Jan. Fuel consumption growth slowed down to 5.7%YoY in Feb from 8.3% in Jan, primarily driven by less petrol consumption. GST collections in Feb grew by a healthy 12.5%YoY against 10.4% in Jan. CMIE consumer sentiment in Feb stayed constant at 104 levels.
  • Rural trends continue to show weakness – Similar to last month, wholesale tractor volumes contracted by another 31% whereas retail tractor volumes saw a robust growth at 12% in Feb. At 13.5%, fertiliser consumption contracted the most in 10 months in Feb (v/s -9% in Jan). Overall unemployment rose to 8% in Feb from 6.8% in Jan, led by a rise in rural unemployment. MNREGA job demand contracted for the fourth consecutive month, at -12%YoY in Feb; although MNREGA job provided jumped by 9%YoY after 3 months of contraction. Agri credit continues to grow at a robust 20% YoY in Jan.
  • Strong FII inflow in debt in FY24TD; FPI net equity buyers in Feb and strong FDI inflows in Jan– Jan saw net FDI inflows of $5.7bn vs -2.9bn in Dec. FDI has been weak YTD – only $15.4bn in FY24 vs $25bn in FY23. ECB flows in Jan moderated to $3.1bn, taking YTD inflows to $39.2bn vs $22.1bn in FY23. FPI pumped in $0.5bn in Feb, after withdrawing $3bn in Jan. MF equity flows slowed to $1.7bn in Feb v/s $2.8bn in Jan. FII debt inflows stand at $13bn YTD24, against outflows of $1bn in FY23, on the back on India’s inclusion in Global Bond Indices. FX reserves are at a comfortable $619bn.
  • Central govt capex slumps; revenue expenditure still slow – CG capex fell sharply by 40.5%YoY in Jan, after growing at 105% in Dec. 10m YTD capex growth stands at 27%YoY vs the 28% budgeted as per FY24RE. Revenue expenditure continues to contract at 6%YoY in Dec. 10m YTD revex growth stands at a meagre 1.4%YoY vs 2.5% budgeted as per FY24RE. This indicates that the government is on track to achieve its fiscal deficit target of 5.8% for FY24. During the 10m YTD24, state govt capex and revex (of 19 states) grew at 36%YoY and 10%YoY respectively.
  • Trade deficit worsens marginally to $18.7bn, services surplus improve – Trade deficit for Feb worsened marginally to $18.7bn vs $16.5bn in Jan. Overall exports and imports grew by 11.9% and 12.2% YoY respectively. Core exports showed a robust growth of 17.2%, while core imports grew by 5.5% YoY. Services surplus continues to expand slightly on a MoM basis – coming in at $16.8bn in Feb’24, primarily driven by rising exports.
  • Global yields stable after rise in Feb, INR an outlier – The US 10yr yield has risen to ~ 4.2%, while EU yields are at 2.4% currently. Fed’s dot plot still shows three rate cuts, totaling to 75bps in 2024; although the timing of cuts remains uncertain. Indian 10yr yields are still lower at 7.1%. DXY is higher at 104, as compared to the recent lows of 101; but still lower than the Oct peak of 108 levels. INR appreciated by 0.2%, Yuan remained flat, and EM FX basket depreciated by 0.9% respectively in Feb.
  • US inflation sticky, labor market showing signs of cooling – M2 growth in US continues to be negative, while for China at 9% YoY. Inflation in US remained sticky in Feb at 3.2% YoY v/s 3.1% in Jan, primarily led by higher food inflation. Unemployment rate in the US rose to 3.9% in Feb v/s 3.7% in Jan – showing signs of some cooling in the labour market. Consumer confidence saw a small decline, and remains below the pre-pandemic levels. PMI for USA and China crossed 50 levels, while EU is in contraction zone since several months.
  • Commodities prices see an uptick recently – Brent touches $85/bbl, after hovering around $80/bbl over the past few months. LME metals index also rose to 3800 level, after hovering around 3600 level for some time. CRB food index rose to 520 levels from 490 levels in Jan.

Related Tags

  • Indian economy
sidebar mobile

BLOGS AND PERSONAL FINANCE

Read More

Invest Right News

BSE: Firing on all cylinders
9 Apr 2024|10:33 AM
Read More
Knowledge Center
Logo

Logo IIFL Customer Care Number
(Gold/NCD/NBFC/Insurance/NPS)
1860-267-3000 / 7039-050-000

Logo IIFL Capital Services Support WhatsApp Number
+91 9892691696

Download The App Now

appapp
Loading...

Follow us on

facebooktwitterrssyoutubeinstagramlinkedintelegram

2025, IIFL Capital Services Ltd. All Rights Reserved

ATTENTION INVESTORS

RISK DISCLOSURE ON DERIVATIVES

Copyright © IIFL Capital Services Limited (Formerly known as IIFL Securities Ltd). All rights Reserved.

IIFL Capital Services Limited - Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213,IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248, DP SEBI Reg. No. IN-DP-185-2016
ARN NO : 47791 (AMFI Registered Mutual Fund Distributor)

ISO certification icon
We are ISO 27001:2013 Certified.

This Certificate Demonstrates That IIFL As An Organization Has Defined And Put In Place Best-Practice Information Security Processes.