India Macro Weekly: Consumer price inflation elevated, exports show growth

For the week ended July 16, 2016:
  • The past week was a data heavy one, which saw the release of key indicators like inflation, industrial production and foreign trade.  
  • CPI inflation continue to remain elevated, coming in at 5.8% on a year on year (yoy) basis in June 2016, a 22 month high, on account of rising food inflation. WPI also showed inflation  for the third consecutive month, and also came in at a 20 month high of 1.6%, though the levels by themselves are quite muted.
  • Merchandise exports showed positive growth in June 2016 after 18 months of decline. The growth figure itself was small at 1.2%, however. On the downside, imports continued to shrink and the trade deficit widened to a six months high.
  • Industrial production showed a small positive growth of 1.2% in May 2016, which represents an improvement from the decline seen last year, but is still less than half the growth seen during May 2015. The capital goods’ segment in particular remains a cause of concern, since it showed a decline for the seventh month straight, reflecting poorly on the investment cycle.
  • Area under the Kharif crop finally exceeded that seen during the previous year, as rains continued to be bountiful.
  • The impact of Brexit on exchange rates waned in the past week, as the GBP showed some appreciation against the INR.
This summary is part of our weekly subscription based report – India Macro Weekly. To know about the subscription details, please write in at orbis.economics@orbiseconomics.com and we will respond to you as soon as we can.

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