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 June 2024

• The quarterly national accounts data released by the MoSPI on 31 May 2024 showed a real GDP growth of 7.8% in 4QFY24. With this, the FY24 real GDP growth was at 8.2%, accelerating from 7% in FY23.
  
  
• In May 2024, both manufacturing and services PMI indicated a slower but substantial expansion with their respective levels at 57.5 and 60.2.

• Led by a moderation in the growth of manufacturing output, IIP growth eased to 5.0% in April 2024 from 5.4% in March 2024.
  
  
• CPI inflation at 4.7% in May 2024 continued its downward trend since January 2024. Core CPI inflation at 3.0% in May 2024 was at its lowest level in the 2012 base series.
  
  
• WPI inflation remained low at 2.6% in May 2024, although higher than 1.3% in April 2024, mainly due to benign inflation in manufactured products and fuel and power.
  
  
• The RBI retained the repo rate, for the eighth consecutive time, at 6.5% in its June 2024 monetary policy review.
  
  
• As per the CGA, GoI’s gross tax revenues (GTR) showed a strong growth of 13.5% in FY24 with growth in direct taxes at 17.6% and that in indirect taxes at 8.3%.
  
  
• GoI’s total expenditure grew by 6.1% in FY24, with growth in capital expenditure at 28.8% and that in revenue expenditure at 1.2%.
  
  
• GoI’s fiscal and revenue deficits relative to GDP in FY24 stood at 5.6% and 2.6%, an improvement over the FY24 RE at 5.8% and 2.8% respectively.
  
  
• Gross bank credit continued to show a double-digit growth of 15.3% in April 2024, although easing from 16.3% in March 2024.
  
  
• Growth in merchandise exports increased to 9.1% and that in imports reduced marginally to 7.7% in May 2024 from 1.1% and 10.3% respectively in April 2024.
  
  
• Current account showed a surplus for the first time in 10 quarters at 0.6% in 4QFY24. On an annual basis, current account deficit eased to 0.7% of GDP in FY24 from 2.0% in FY23.
  
  
• Net FDIs turned positive, registering inflows amounting to US$4.0 billion in April 2024 as compared to net outflows of US$3.7 billion in March 2024.
  
  
• Average global crude price eased from US$88/bbl. in April 2024 to a three-month low of US$81.4/bbl. in May 2024 owing to the expectation of continued high interest rates by the US Fed for longer than expected.
  
  
• The United Nations has projected global growth at 2.7% in 2024 and 2.8% in 2025, with India’s projected growth rates in these calendar years at 6.9% and 6.6% respectively.