DSP TATHYA - September 2023

Consumer confidence remains strong, as reflected by the massive expansion in personal loans, despite an uptick in lending rate. The substantial jump in consumption of petroleum products, is majorly owed to high volumes sold amidst anticipation around rise in oil prices.

With core inflation dropping to a 40- month low, it has maintained a disinflationary trend for 2 quarters now. Growth in headline number remains high, owing to a rather swift rise in food prices.

The impressive growth in Mining was implied given the expansion in production of coal, combined with growth in crude oil output. Manufacturing PMI continues to remain robust. The deflationary pattern in WPI has eased.

Amidst a global economic slowdown, the Services PMI continues to hold up. Growth in railway freight traffic accelerated at a remarkable pace, the highest in 11 months, owing to an increase in almost all it’s notable components.

The growth of money supply has eased from the recent peak, and is expected to further decelerate due to proactive measures taken by RBI in this regard.

On fiscal front, GST collections have begun to normalise, because of normalisation in prices. But the impact is not so pronounced, because of the higher volume of goods being transported.

While Rupee depreciated against USD, it has appreciated against some of the major currencies. Oil price increases due to supply disruptions have led to major increase in the Crude Indian Basket. Non-oil Non-gold Imports contributed the most to the widening merchandise deficit.

While FII flows in equity have slowed, the debt portion after reviving from temporary fall, has made a notable expansion. We re-iterate that given India is appearing a steady ship in choppy waters, it is likely to get its fair share of FII flows. Both, MF equity flows and the SIP book have experienced a notable increase.