India Economic Outlook
January 25, 2022After economic growth moderated in Q3 (FY Q2 2021), mainly due to a fading base effect, activity should have eased further year-on-year in Q4, but will have likely strengthened in sequential terms. In October–December, the composite goods PMI averaged notably higher than in the previous quarter, while the PHDCCI economy GPS index—a leading indicator of GDP—hit a fresh record high in December, pointing to healthier demand dynamics relative to Q3. Shifting focus to this calendar year, new Covid-19 cases have surged in recent weeks, leading authorities to tighten some restrictions to contain the spread, but this should have a relatively limited impact on the economic recovery. Meanwhile, the government is expected to unveil its fiscal year 2022–2023 Union Budget on 1 February, which should see slightly stronger spending more than offset by higher revenues, leading to a narrowing of the fiscal deficit.
India Economic GrowthFollowing an expected strong expansion in FY 2021 (April 2021–March 2022), GDP growth is seen losing some momentum in FY 2022 as the low base effect fades. That said, healthy household spending should keep the economy growing at a brisk pace. Uncertainty over the emergence of the Omicron variant, supply chain difficulties and twin deficits pose risks. FocusEconomics panelists project GDP to expand 8.0% in FY 2022, which is up 0.3 percentage points from the previous month’s forecast. In FY 2023, our panel expects growth of 6.4%.
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|Bond Yield||6.50||-0.04 %||Jan 01|
|Exchange Rate||71.23||-0.09 %||Jan 01|
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India Economic News
January 12, 2022
Consumer prices fell 0.36% from the previous month in December, swinging from November's 0.73% rise.
January 10, 2022
Industrial output rose 1.4% in year-on-year terms in November, which followed October's 4.0% increase.
January 5, 2022
The composite Purchasing Managers’ Index (PMI) produced by IHS Markit dipped to 56.4 in December from 59.2 in November.
December 10, 2021
Merchandise exports rose 27.0% annually in November (October: +43.2% year-on-year).
December 10, 2021
Industrial output increased 3.1% compared to the same month of the previous year in October, which was weaker than September's 3.3% expansion.