India International Reserves (months of imports)

After growing 9.7% in the first two quarters of FY 2022 (April 2022–March 2023), the economy should have slowed in Q3 FY 2022. Elevated inflation, rising interest rates and a weakening global economy all likely dragged on momentum. The industrial sector grew just 2.3% in the quarter, while merchandise exports fell 5.5% over October–December. That said, PMI data was more positive, with both the manufacturing and services PMIs in the quarter averaging near their H1 FY 2022 levels. In other news, the government unveiled its FY 2023 budget on 1 February. Spending is to rise 7.5%, with capital outlays increasing especially sharply. Revenue is to rise 12.1%, leading the fiscal deficit to decline to 5.9% from 6.4% this year. The budget was well-received by the market, with populist measures avoided in favor of policies to boost medium-term growth while maintaining fiscal consolidation.