India Macro Weekly: Current account widens, mixed activity picture

For the week ending September 16, 2017: 
  • On the economic activity front, the Index of Industrial Production (IIP) continued to disappoint, with a growth  of a small 1.2% in July 2017, even as it was a turnaround from the contraction witnessed during the previous month. 
  • Going by the data on merchandise trade, however, next month could show better results, as exports grew by a healthy 10.3% in August 2017, after softening to single digits in the past three months. Imports, too, continued to show a robust growth of 21%, indicating healthy domestic demand, which bodes well for consumption trends.  
  • Two inflation releases – Consumer Price Index (CPI) and Wholesale Price Index – showed an uptrend. CPI inflation came in at 3.36%, still under check, though core pressures are rising. WPI inflation, was slightly lower at 3.2%, driven by food and fuel prices. 
  • The quarterly Balance of Payments (BoP) release showed a significant widening in the current account deficit to 2.4% of the GDP as the goods trade deficit widened, and the services surplus was unable to match step. However, on the financial account, both FDI and FPI inflows into India improved.
  • On the policy front, Japanese PM, Shinzo Abe’s recent visit from Japan to India, led to the signing of a number of cooperation agreements between the two countries.
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1 comment:

  1. What a great blog post. You summed up all the events in such a way, good job. Keep on doing this, I will follow your blog for this.