Monthly Macro Dashboard: IIFL Capital Services

24 Apr 2023 , 10:51 AM

 

• IIP in February 2023 came in at 5.6% YoY, but was merely 1.1% on a 3-year CAGR basis. Consumer Goods recorded a 5.6% YoY growth, driven by a strong 12.1% growth in Non-Durables. However, Consumer Durables continued to struggle and remain in contraction zone, at -4% YoY and -2.6% 3-year CAGR. Coal/Steel/Cement production continue to be reasonably strong between 7-9% on YoY basis in February. Bitumen consumption continued to see a slowdown in March (-1.1% YoY), while Railway freight traffic grew a modest 3.8% YoY.
• PV sales growth moderated to 4.5% YoY in March (versus 11% YoY in February). 2W sales growth remained at 9% YoY, same as in February. Tractor sales growth too moderated to 13.7% YoY in March (versus 20% in February). Petrol consumption grew 6.8% YoY, while diesel consumption saw a meagre 1.2% YoY growth in March.
• For Rural (especially Agri) – fertilizer consumption grew by 9.9% YoY in February (versus 18% YoY in January). Overall unemployment increased to 7.8% in March (versus 7.5% in February). Urban unemployment jumped to 8.5% (versus 7.9% in February) while Rural saw an increase from 7.2% in February to 7.5% in March. MNREGA demand rose to 28 mn in March, up from 26mn in February. Agri credit growth came in at a record 14.9% YoY in February. On balance, rural is looking up.
• M3 grew by 9.0% YoY in March and CD ratio came in at 75.8, since credit growth remained strong at 15.4% YoY. Sectorally, industry credit growth seems to be slowing down every month compared to others; growing at only 7% YoY in March. Other sectors continue to see buoyant credit growth of ~20% YoY. Deposit growth grew by 9.6% YoY in March.
• Manufacturing PMI expanded to 56.4 in March (versus 55.3 in February), while Services PMI remains buoyant at 57.8 (despite being down from 59.4 in February). CMIE consumer sentiment continues to expand; and at 89.2, is at its highest since the pandemic began. Both Urban and Rural sentiments see improvement to 89.2 respectively.
• GST revenue continues to grow at 12.7% YoY, with e-way bills clocking in a record 2.9mn per day in March.
• Trade balance came in at US$ -19.7 billion in March (versus -16.2 billion in February), as gold imports saw a pickup after a sharp drop in January; while oil imports remained low. Services balance stayed buoyant at US$ 13.7 billion, as Service imports saw a contraction of 8.2% YoY in March. FX reserves picked up from February — coming in at US$ 578 billion in March.
• In terms of flows, FIIs saw a net inflow of US$ 1.8 billion in March, after three months of outflows. MFs continue to pour money in equities, with March seeing a net inflow of US$ 2.5 billion. This comes on the back of healthy MF equity collections of US$ 4.2 billion in March. Debt MF saw a heavy outflow of US$ 6.6 billion, mainly on account of change in taxation of debt schemes.
• India inflation decreased to 5.7% YoY in March, as core CPI also cooled slightly to 5.8% YoY. US CPI inflation fell for the ninth straight month (5.0% YoY in March, down from 9% in June). US retail sales grew by 3% YoY in March, staying negative in real terms. US unemployment came in 3.6% in March — slightly lower than 3.9% in February.
• Oil has jumped back up to $81/bbl currently, after touching $70 briefly in March. LME has also picked up slightly, presently at 4,030 versus 3,824 in mid-March. Gold continues to be high at $1,995 per ounce. Currently at 536, CRB Food Index has remained more or less static in CY23 so far. On balance, odds are that inflation will continue moderating.