Economic Indicators (as on May 31, 2024)

Inflation in India (%)

Consumer Price Index decelerated marginally to 11-month low to 4.83% in Apr’24 from 4.85% in Mar’24 due to easing food prices. Though, retail inflation is below the Reserve Bank of India’s upper tolerance level of 6%. Wholesale Price Index (WPI) rises to 13-month high to 1.26% in Apr’24 from 0.53% in Mar’24 due to increase in prices of food articles, crude petroleum & natural gas, electricity, machinery & equipment and motor vehicles, trailers & semi-trailers etc. It stepped out of the deflationary zone for the sixth time in row.

Index of Industrial Production (%)

Index of Industrial Production (IIP) rises to 4.9% in Mar’24 from 5.7% in Feb’24, indicating a growth in the manufacturing sector of the Indian economy. Manufacturing output, which accounts for a considerable majority of industrial production, expanded by 5.2%. Mining sector growing by 1.2% and electricity growing by 8.6%.

Indian Business Indicators - Purchasing Managers' Index (PMI)

S&P Global India Manufacturing Purchasing Managers' Index (PMI) reduced marginally to 57.5 in May’24 from 58.8 in Apr’24, led by new orders, upturn in inventories and higher job creation signalling a slower but still substantial improvement in the health of the sector. The manufacturing PMI has now spent 35 consecutive months above the key level of 50. PMI Services marginally decreased to 60.2 in May’24 from 60.8 in Apr’24. Though the new business expanded at a faster pace and expectation for future activity was strong. The new export business index accelerated, signalling that India’s services exports remained robust. Though the reading remains in the expansion zone as a print above 50 means expansion while a score below 50 denotes contraction.

USD INR & Brent Crude Movement

Brent crude oil stood at ~US$ 81.62 due to industry data showing an increase in the stockpiles of both crude and gasoline. Prices fell further due to worries that rising interest rates will dampen demand and slow economic growth. The Rupee closed the month on 83.465 against Greenback as on May'24.

Equity Markets - India & US

Bellwether indices, Nifty 50 and S&P BSE Sensex decreased marginally during the month by -0.70% and 0.33% respectively on m-o-m basis. Upbeat corporate earnings in the final quarter of FY’24 kept the investors optimistic. Equity markets rose during the week after the RBI approved a massive, all-time high surplus transfer of around Rs. 2.11 lakh crore for FY24, boosting government revenues and supporting the fiscal deficit target. Foreign Institutional Investors (FIIs) were net sellers in Indian equities to the tune of ₹ 25586.30 crores this month. Domestic retail inflation is within the Reserve Bank of India’s upper tolerance level of 6%. Goods and Services Tax (GST) shows collection of ₹ 1.73 lakh crore for May’24, 10% more than the corresponding period of last year and this points towards the growing trajectory of the Indian economy. Dow Jones decreased by 2.30% from previous month.

Interest Rate Movement (%) - India & US

Yield on the 10-Year benchmark paper remained range-bound, closing at 6.944% on May'24 vs 7.186% on Apr'24 as the Indian government decided to continue pumping money into the banking system in the upcoming weeks after reducing the supply of Treasury bills. Gains were extended after the RBI approved a record surplus transfer of Rs. 2.11 lakh crore to the government for the fiscal year ended on Mar'24. Treasury bond closed lower at 4.4985% on May’24 vs 4.6798% on Apr’24.

Inflation in India (%)

India’s GDP growth hit it out of the park with 7.76% for Q4 FY24 vs 8.4% for Q3 FY24, and 8.2% in FY24, majorly because of construction and manufacturing sector.India remains fastest growing economy in the world, strong GDP was supported by various factors like robust corporate profits, a strong fiscal impulse, with government spending being front-loaded in a pre-election year. This GDP growth came in much higher than expected as robust momentum in domestic demand conditions continues to reflect in the GDP numbers, which have surprised on the upside for four consecutive quarters, citing firm GST collections, credit growth and Purchasing Managing Index.