Economy Watch

Economy Watch was launched for public distribution soon after demonetization. Since then more than 90 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 April 2024

• In March 2024, manufacturing PMI increased to a 16-year high of 59.1, while services PMI at 61.2 remained above 60 for the third consecutive month.
• IIP growth increased to a four-month high of 5.7% in February 2024 due to a broad-based improvement in the growth of all the key sub-industries.
• The RBI retained the repo rate at 6.5% for the seventh successive time in its monetary policy review held on 5 April 2024.
• CPI inflation eased marginally to 4.9% in March 2024 as inflation in fuel and light and food items eased. Core CPI inflation remained stable at 3.3% in March 2024. On an annual basis, CPI inflation was at 5.4% in FY24.
• WPI inflation remained low at 0.5% in March 2024 as compared to 0.2% in February 2024. On an annual basis, WPI inflation was at (-)0.7% in FY24.
• During April-February FY24, GoI’s gross tax revenues (GTR) showed a growth of 13.4%, with growth in direct taxes at 21.6% and that in indirect taxes at 4.6%.
• GoI’s total expenditure grew by 7.3% during April-February FY24, with growth in capital expenditure at 36.5% and that in revenue expenditure at 1.3%.
• GoI’s fiscal and revenue deficits during April-February FY24 as a proportion of their annual RE stood respectively at 86.5% and 87.1%.
• Growth in gross bank credit increased to a 16-month high of 16.5% in February 2024 as compared to 16.1% in January 2024.
• Current account deficit was low at 1.2% of GDP in 3QFY24 as compared to 1.3% in 2QFY24.
• Merchandise exports contracted by (-)0.7% and imports by (-)6.0% respectively in March 2024 as compared to a growth of 11.9% and 12.2% respectively in February 2024. On an annual basis, merchandise exports and imports contracted by (-)4.7% and (-)5.7% respectively in FY24.
• Merchandise trade deficit narrowed to US$245.3 billion in FY24 from US$264.9 billion in FY23.
• Net FDI inflows fell sharply to US$0.3 billion in February 2024 from US$5.7 billion in January 2024.
• Average global crude price increased to a five-month high of US$83.5/bbl. in March 2024. On an annual basis, global crude price averaged US$81.1/bbl. in FY24, lower than US$92.7/bbl. in FY23.
• The IMF has projected global growth at 3% in 2024 and 2025, remaining unchanged from its level in 2023. India’s FY25 and FY26 growth is forecasted at 6.8% and 6.5%, respectively