India

India Data Response

India Data Response

Wholesale Prices (Aug.)

Following the weaker-than-expected consumer price inflation data for August released yesterday, headline wholesale price inflation data released today surprised to the upside. But it should resume dropping before long, particularly if commodity prices fall back as we expect. In all, there’s little in the August inflation data to pressure the RBI to start tightening policy.

14 September 2021

India Data Response

Consumer Prices (Aug.)

The drop in India’s consumer price inflation in August was driven by a continued fall in food inflation. We expect a broader easing in price pressures to bring headline inflation further below the 6% upper limit of the RBI’s target range over the coming months, so we remain comfortable with our view that policy rates will be kept on hold for a while longer.

13 September 2021

India Data Response

Services & Composite PMI (Aug.)

The sharp rises in India’s services and composite PMI readings in August support our view that the economy has staged a strong rebound in Q3. But downside risks remain significant as the threat of further virus waves continues to loom.

3 September 2021
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India Data Response

Manufacturing PMI (Aug.)

The drop in India’s manufacturing PMI in August is probably just a sign of activity normalising following the strong pace of recovery in recent months. But the threat of further virus waves remains a significant downside risk to the outlook.

India Data Response

GDP (Q2)

The record y/y rise in Indian GDP in Q2 (Q1 of FY21/22) was due entirely to base effects. We estimate that the economy shrank by 12% in q/q terms as India struggled with its Delta outbreak. Timely activity data point to a sharp rebound more recently as containment measures have been scaled back, but the risk of further outbreaks clouds the outlook.

India Data Response

Wholesale Prices (Jul.)

The drop in India’s headline wholesale price inflation in July came on the back of an easing in fuel and food inflation, both of which have further to run. And with headline CPI inflation having already peaked, we remain comfortable with our view that policy rate hikes will not come onto the agenda until well into next year.

India Data Response

Consumer Prices (Jul.) & Industrial Production (Jun.)

India’s consumer price inflation dropped below the 6% upper limit of the RBI’s target range in July, and we think further falls are likely. With the economy also still weak, there should be little doubt that the central bank will be keeping policy rates on hold for some time to come.

India Data Response

Services & Composite PMI (Jul.)

The rebound in India’s PMI surveys in July provides further evidence that the economy was quick to get back on its feet after the second virus wave. But the rapid reopening, combined with low vaccination coverage, increases the threat of new outbreaks. In that regard, the sharp rise in cases in Kerala over the past couple of weeks is a major concern.

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