Economy Watch

Economy Watch was launched for public distribution soon after demonetisation in December 2016. Since then, nearly 75 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 March 2023

1. Real GDP and GVA growth fell to 4.4% and 4.6% respectively in 3QFY23 from 6.3% and 5.5% in 2QFY23.
2. In February 2023, PMI indicated a sustained robust growth in manufacturing with its level at 55.3. PMI services was at a 12-year high of 59.4 during the month.
3. Led by higher growth in electricity and manufacturing output, IIP growth improved to 5.2% in January 2023 from 4.7% in December 2022.
4. Driven by elevated food and fuel prices, CPI inflation remained at a high level of 6.4% in February 2023, although marginally lower than 6.5% in January 2023.
5. WPI inflation fell to a 25-month low of 3.9% in February 2023, led by moderating inflation in crude and commodities, and aided by a favorable base effect.
6. Central government’s gross tax revenues (GTR) grew by 12.6% during April-January FY23 with growth in direct taxes at 16.8% and that in indirect taxes at 8.6%.
7. During April-January FY23, GoI’s total expenditure grew by 12.8%, with growth in revenue expenditure at 9.7% and that in capital expenditure at 29%.
8. During April-January FY23, GoI’s fiscal and revenue deficits as a proportion of RE stood at 67.8% and 61.1% respectively.
9. Growth in bank credit increased to a three-month high of 16.3% in January 2023 from 14.9% in December 2022.
10. Contraction in merchandise exports and imports increased to (-)8.8% and (-)8.2% respectively in February 2023, from (-)6.6% and (-)3.6% in January 2023 reflecting moderating global demand.
11. Merchandise trade deficit narrowed to a 13-month low of US$(-)17.4 billion in February 2023 from US$(-)17.7 billion in January 2023.
12. Net FDI inflows surged to an eight-month high of US$4.1 billion in January 2023.
13. Average global crude price at US$80.3/bbl. in February 2023 remained nearly unchanged from its January 2023 level. The US EIA has projected brent crude price at US$83/bbl. in 2023, easing to US$78/bbl. in 2024.
14. The OECD has projected global growth at 2.6% in 2023, with India’s FY24 growth forecasted at 5.9%.