Indian Economy: Monthly Macro Dashboard

22 Aug 2023 , 11:00 AM

Highlights: 1) Vehicle sales continue slowdown – PVs grow by 3% YoY while 2Ws see 7.2% YoY contraction. 2) Freight movement saw some pickup from June lows as both railway freight and port container traffic saw growth on YoY basis 3) Inflation spikes to 7.4% due to food prices, but RBI feels it is transitory and should normalize soon. 4) Credit growth improved to 20% YoY in July, with CD ratio at a 4 year high of 77.2 as HDFC merger came into effect. 

• Jun’23 IIP growth slowed to to 3.7% YoY vs 5.3% YoY in May. Coal/Cement production continue to be reasonably strong 9.8%/9.4% YoY in June, while steel production saw a robust 21.9% YoY growth. Bitumen consumption also saw a strong pickup in July (55.8% YoY vs. 9.5% in June).
• Freight movement saw some pickup in July from June lows as railway freight traffic grew by 1.5% YoY (vs. 1.9% contraction in June). Port cargo traffic picked up to 4.4% YoY and Port container traffic improved to 11.1% YoY in July (vs 6.5% contraction in June).
• Volume growth across most Auto segments was muted in July 2023 as PV sales growth grew by 2.6% YoY. 2W sales saw a 7.2% YoY contraction in July. Domestic air passenger traffic growth at 25% YoY in July picked up from last month. Fuel consumption growth slowed to 1.9% YoY in July vs 4.5% in June.
• For Rural (especially Agri) – Tractor volumes saw a 6.1% YoY growth in July on an easy base. Overall unemployment eased slightly to 8% in July (vs 8.5% in June) with rural improving from from 8.7% in June to 8% in July. MNREGA demand fell from 44mn in June to 29mn in July, but is still up 15% YoY. Agri credit growth improved to 20% YoY in June.
• M3 grew by 10.6% YoY in July and CD ratio increased to 77.2 (highest in over 4 yrs). Deposits grew by 13% YoY, while credit growth improved to 20% YoY. Sectorally, industry credit growth continues to grow at modest pace of 8% YoY. Other sectors continue to see buoyant credit growth of ~20% YoY. = Surveys continue to indicate strong activity levels – Mfg PMI stable at 57.7 in July and Services PMI improving to 62.3 (highest in 13 years). CMIE consumer sentiment also stable at 96.5, with rural sentiments improving to 98.4.
• July’23 trade deficit came in at $21bn, slightly higher than $19bn in June. Overall exports declined 16% YoY while imports declined 17%. Core exports declined by 6% YoY (8th straight month of decline). Services balance continued to be healthy at $12.3bn. FX Reserves picked up from June, coming in at US$ 604bn in July.
• India inflation rose sharply to 7.4% YoY in July’23 mainly due to spike in food prices. Core CPI remained sticky at 5% YoY. US & Euro CPI came in at 3.2% & 5.3% respectively. US retail sales saw a 3.2% YoY growth (0.7% MoM), turning flattish real terms. US money supply has now seen contraction for 9 months in a row (- 3.3% YoY in July).