Economy Watch

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Economy Watch provides an in-depth review of salient developments in India’s macroeconomy and economic policy in a global context.
It has established itself as a thought leadership publication, providing valuable inputs for policymakers in the central and state governments, academicians, industry and businesses and other stakeholders.

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Economy Watch was launched for public distribution soon after demonetisation in December 2016. Since then, nearly 40 issues have been published.

It covers various macro-fiscal dimensions of the Indian economy including growth, inflation, government finances, external trade, monetary and financial sectors. It places India in a comparative economic framework using selected developed and developing countries.

Two innovative indices have been developed to capture changes in aggregate demand and macroeconomic imbalances in the Indian economy. The analysis in the Economy Watch is based on monthly, quarterly and annual data sourced from national and international sources.

Every month, a focused theme of contemporary economic importance is identified for a deep and insightful analysis which provides useful inputs and recommendations.

Key highlights for November 2021
  1. In October 2021, PMI manufacturing increased to an eight-month high of 55.9 and PMI services increased to a ten and a half year high of 58.4. 
  2. IIP growth moderated to 3.1% in September 2021 from 11.9% in August 2021. On a quarterly basis, as the base effect waned, overall IIP grew by 8.7% in 2QFY22 as compared to 44.3% in 1QFY22.
  3. CPI inflation increased for the first time in the last five months to 4.5% in October 2021 from 4.3% in September 2021. Core CPI inflation remained elevated at a seven-month high of 6.1% in October 2021.
  4. WPI inflation increased to a five-month high of 12.5% in October 2021 from 10.7% in September 2021 led by high inflation in fuel and power.
  5. As per the CGA, Center’s gross taxes grew by 64.2% during 1HFY22 over 1HFY21, and by 28.7% over 1HFY20.
  6. Center’s total expenditure grew by 9.9% during 1HFY22 with a growth of 6.3% in revenue expenditure and 38.3% in capital expenditure.
  7. During 1HFY22, Center’s fiscal and revenue deficits as a proportion of their corresponding BE stood respectively at 35.0% and 27.7%, their lowest levels since FY11.
  8. Merchandise exports and imports growth remained high at 43.0% and 62.5% respectively in October 2021 as compared to 22.6% and 84.8% respectively in September 2021 driven by higher global crude prices.
  9. Merchandise trade deficit remained elevated at US$19.7 billion in October 2021.
  10. In October 2021, global crude price increased to a seven-year high of US$82.1/bbl. Global coal price at US$218.3/mt. in October 2021 was at an all-time high as per the World Bank’s commodity price series beginning January 1960.
  11. The World Bank has projected South Asia to grow by 7.1% in 2021 with India’s growth forecasted at 8.3% in FY22.

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