End of FY24 is as good time as any to do a check on a few key indicators. This selection below is based on my interest. (Caveat - there will be a few indicators more important than the ones below and as I learn more about the way the economy works, this selection will undoubtedly undergo a change).
Research Lab Opinion - Going by the sub-set of the universe covered by these 4 indicators, it would appear that the optimism around GDP growth is well founded. While I don't believe the war on inflation is over, the trend appears to be heading in the right direction. It may be a while before RBI brings down the interest rate. Other metrics like card usage and consumption of petroleum products are riding along nicely and indicate a broad-based uptick in the economic activities. Rates:
On 8Feb23 RBI hiked the REPO rate to 6.5% and has since then held the rate. The REPO rate - short for repurchasing option rate - is a tool for RBI to control inflation and manage liquidity. This is the rate at which commercial banks borrow money from RBI. A change in the REPO rate has a cascading effect on the interest rate given by banks for their lending/deposit rates to their customers and there by on the money supply and economic activities. By keeping the rates steady for the last 1 year RBI has given the indication that it believes that at this rate the inflation can be kept within its tolerance band (4% +/- 2%) in the near future. The headline CPI for Feb 2024 was at 5.3%. It takes a few months for the rates to be transmitted.
GDP is expected to grow around 7.6% per the advanced estimate by NSO
Yields on T-bills, based on the weekly auction of these securities - show a slight inversion between the 182 day and the 364 day bills. The yield curve is an upward sloping curve and the rates increase with the maturity periods
The spot rate for INR-USD was at 82.93
Crude / LPG:
Even with the ongoing geopolitical events, price of crude for India Basked remained below $85 per barrel
We continue to be extremely reliant on imports for our fuel needs. We had a net import of ~218,000,000 MT
For consumption, diesel, motor spirit and LPG continue to account for more than 50% of our total consumption while growing ~5% year-on-year
On an average, our per capita consumption of LPG cylinders stands at 5.68 while that for those with PMUY connection is lower at 3.84
Select pricing of LPG (4 metros as reported by IOCL) show a gradual move towards international prices
Inflation:
Headline inflation has been within RBI's upper tolerance band from around Oct;22 except for a brief rise in the middle of last year driven by inflation in foods and beverages
Based on NSO and RBI estimates, the CPI Inflation is expected to be around 5.1% in Q4, FY24
Within food, vegetables have been the single biggest contribution to the inflation seen in this segment
Card Statistics:
The transaction amount of credit cards and debit cards are seeing a steady increase M-o-M
Credit card transaction value crossed Rs 1.6 trillion in Mar24 while debit card transaction value during the same period was one fourth of that at Rs 0.45 trillion
Most credit card transactions happen online/ecom channels, with average purchase per transaction being well above Rs 6,000
All data as on 31 Mar 24 unless otherwise mentioned
Sources:
RBI Retail Direct
Website of Petroleum Planning and Analysis Cell, Govt of India
RBI Monetary Policy Statement (April 3 - 5) 2024-25
RBI - Bankwise ATM/POS/Card Statistics
Comments