India Macro Weekly: Core industry, credit remain weak, external debt in check




For the week ended April 1, 2017:

  • On the activity front the week continued to be disappointing as core output growth fell to the lowest in 15 months of 1%, in February 2017. 
  • Credit growth also declined to a low of 3% during the month, on account of poor offtake by the industrial sector, even though credit ex-industry continued to grow at a relatively robust pace. 
  • The external sector debt report for Q3, 2016-17 showed a slight decline the absolute value of debt, as well as a slight change in debt composition in favour of short-term debt and a move away from long-term debt. Debt ratios stayed stable and healthy as per the latest reading. 
  • The Orbis Economics Exchange Rate Index for 2016-17 showed a sharp appreciation in the rupee against the GBP compared to 2015-16 levels, on account of broad based depreciation in the latter with the Brexit underway. However, the rupee was somewhat depreciated against both the USD and EUR during the year. In March 2017 alone, however, the rupee gained substantially against all major currencies. 
  • The Macro Meter rating remained unchanged, on account of status quo on broad trends in net FPI inflows, credit and deposit growth.  

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