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Higher commodity prices beginning to take a toll India’s manufacturing PMI dropped back in March as high commodity prices caused by the war in Ukraine began to take a toll on the sector. Given that fuel and gas prices have only climbed higher since the …
4th April 2022
Industrial recovery faces new headwinds Output from India’s core infrastructure industries picked up in February as the Omicron wave subsided. But the surge in commodity prices as a result of the war in Ukraine is likely to squeeze profit margins and …
31st March 2022
Commodity price surge will keep headline inflation high India’s consumer price inflation breached the RBI’s 6% ceiling in February, sooner than even our relatively hawkish forecasts had suggested. The surge in commodity prices will keep the headline rate …
14th March 2022
WPI inflation to remain elevated for a while yet Indian wholesale price inflation remained near historic highs in February, and it is likely to stay elevated in the near term given the recent surge in commodity prices. Headline WPI edged up from 13% y/y …
Industry holds up despite Omicron, but new headwinds emerge Indian industrial production held steady in m/m terms in January, supporting our view that the Omicron hit to the economy was small. But looking ahead, the surge in commodity prices as a result …
11th March 2022
Omicron impact proves short-lived The rebound in India’s February PMIs suggests that activity is bouncing back as the Omicron outbreak subsides. And we think that there’s still significant scope for the economy to grow rapidly over the coming quarters. …
4th March 2022
High commodity prices clouds outlook India’s manufacturing PMI rebounded in February as the Omicron outbreak subsided and containment measures were scaled back. But the threat of a continued rise in commodity prices as a result of the war in Ukraine is a …
2nd March 2022
Economy slowed at end of 2021 but strong growth likely this year Indian GDP data for Q4 (Q3 of FY21/22) show that economic growth was slowing before the Omicron wave hit. That outbreak will have caused activity to weaken further in the early stages of Q1. …
28th February 2022
Inflation likely to breach the RBI’s target soon Indian consumer price inflation reached the 6% ceiling of the RBI’s target range in January and, in contrast to the central bank, we think it will rise a bit further over the coming months. That will …
14th February 2022
Fallout from Omicron has been limited The drop in India’s PMIs in January suggest that activity weakened as the Omicron variant spread across the country. But the impact appears to be much less severe than that of the last two virus waves. And with new …
3rd February 2022
Inflation likely to breach the RBI’s target in Q1 Indian consumer price inflation took a big step towards the 6% ceiling of the RBI’s target range in December. We think it will breach the ceiling soon and that the RBI will remove some policy support. …
12th January 2022
Recovery ongoing but surge in infections raises downside risks India’s PMIs remained buoyant in December, suggesting that activity continued picking up towards the end of 2021. We think the recovery will gain momentum this year but a recent sharp jump in …
5th January 2022
WPI inflation surges to record high Indian wholesale price inflation unexpectedly jumped to a record high in November. And given the mounting upside risks to the inflation outlook, there is a growing chance that the RBI brings forward the start of its …
14th December 2021
Inflation risks are building India’s consumer price inflation rose to a three-month in November and upside risks to the outlook are mounting. While we still think the RBI won’t raise policy rates until the middle of next year, a sharp rise in food price …
13th December 2021
Manufacturing recovery still fragile The jump in India’s manufacturing PMI in November suggests that the recovery is still ongoing, although it appears that global supply shortages have remained a drag. And with vaccination coverage in India still low, …
1st December 2021
Rapid rebound, but Omicron variant a key downside risk The 8.4% y/y rise in Indian GDP in Q3 (Q2 of FY21/22) is consistent with a rapid q/q rebound as virus restrictions were lifted and activity surged. But timelier data suggest that the recovery has …
30th November 2021
WPI inflation will peak soon The jump in headline wholesale price inflation in October was due almost entirely to higher commodity prices, but we think they are now close to peaking. While the RBI will be wary that wholesale prices remain elevated, …
15th November 2021
Rise in inflation keeps it still well within RBI target range India’s consumer price inflation edged up in October but remained well below the 6% ceiling of the RBI’s inflation target range. And we expect it to stay there for several months yet, which …
12th November 2021
Recovery going strong, but downside risks remain The strength in India’s PMI surveys for October suggests that economic activity continued to hold up well last month. But we still think that the recovery is set to enter a slower phase, and India’s low …
3rd November 2021
Manufacturing recovery still fragile The jump in India’s manufacturing PMI in October paints an upbeat picture of the health of manufacturing, but the recovery remains fragile against the backdrop of persistent global supply shortages and India’s low …
1st November 2021
Industrial recovery falters Output from India’s core infrastructure industries dropped in September, providing further signs that the industrial recovery is faltering on the back of supply constraints. The core infrastructure industries index measures …
29th October 2021
Further falls in WPI inflation likely Headline WPI inflation dropped to a five-month low in September on the back of a fall in food and fuel inflation, both of which are likely to continue easing. And with the recent drop in consumer price inflation also …
14th October 2021
Drop in headline inflation still has further to run India’s consumer price inflation dropped further below the 6% ceiling of the RBI’s inflation target range in September, and we expect it to remain there for several more months. That’s one reason to …
12th October 2021
Recovery going strong, but downside risks remain The buoyant readings in India’s PMI surveys for September add weight to our view that economic output rose back to pre-virus levels in Q3. But the recovery will probably lose momentum over the coming …
5th October 2021
Manufacturing recovery likely to lose a bit of steam India’s manufacturing PMI rose in September, but that is likely to prove the high point as the rapid reopening rebound fades and local manufacturers start to feel the pinch from global supply shortages. …
1st October 2021
Pace of industrial recovery has slowed Output from India’s core infrastructure industries only edged slightly higher in August, suggesting that the rapid reopening rebound has faded. The broader industrial recovery remains fragile against a backdrop of …
30th September 2021
Rebound in WPI inflation likely to be temporary 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 …
14th September 2021
Drop in India’s inflation still has further to run 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% …
13th September 2021
Recovery going strong, but downside risks remain 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 …
3rd September 2021
Manufacturing recovery starting to ease off 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 …
1st September 2021
Q2 contraction to give way to strong Q3, but downside risks remain 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 …
31st August 2021
Further falls in WPI inflation likely 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 …
16th August 2021
Drop in India’s inflation has further to run 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 …
12th August 2021
Recovery takes hold, but new virus waves a key risk 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 …
4th August 2021
Manufacturing recovery underway The sharp rebound in India’s manufacturing PMI in July adds to evidence that the economy has been staging a strong recovery ever since the second virus wave receded. But with vaccine coverage still low, sustained …
2nd August 2021
The industrial recovery is underway India’s core infrastructure industries index rebounded in seasonally-adjusted m/m terms in June, suggesting that an industrial recovery is well underway. The core infrastructure industries index measures output in …
30th July 2021
WPI inflation has peaked Wholesale price inflation dropped for the first time in five months in June and is set to fall sharply over the coming months as commodity prices drop back. With headline CPI inflation also likely to have peaked last month, we …
14th July 2021
Headline inflation has likely peaked India’s consumer price inflation remained above the 6% upper limit of the RBI’s target range for a second consecutive month in June. But if we are right in thinking that inflation has peaked, the central bank won’t see …
12th July 2021
PMI readings to soon rebound, but downside risks still significant The drop in India’s PMI readings for June should soon reverse as the second virus wave has subsided and restrictions are being eased. But a rapid reopening increases the risks of fresh …
5th July 2021
Manufacturing still impacted by second virus wave The drop in India’s manufacturing PMI in June suggests that the recent plunge in new virus cases has yet to translate into a pick-up in manufacturing activity. The recovery should get back on track as …
1st July 2021
Industry has taken a sizeable hit India’s core infrastructure industries index dropped sharply in m/m terms in May, suggesting that the second virus wave has taken a large toll on industry even though it has been subject to fewer restrictions than a year …
30th June 2021
Larger-than-expected jump in inflation should reverse soon India’s consumer price inflation jumped to a six-month high in May on the back of an unexpected surge in core inflation, which we suspect is a result of rising commodity prices now seeping into …
14th June 2021
WPI inflation close to peaking Wholesale price inflation surged to a three-decade high in May on the back of the sharp rise in global commodity prices and will be a concern for policymakers. However, there are reasons to think that WPI inflation has …
Subdued industry delivers triple-digit growth There is unlikely to be a clearer illustration of the distorting impact of base effects than the 134% y/y rise reported in Indian industrial production in April. Industrial output actually dropped in April as …
11th June 2021
Recovery beyond the second virus wave will be slow India’s PMI readings for May adds to evidence elsewhere that the damage from the second virus wave has not been as severe as when the pandemic first struck last year. But with restrictions likely to be …
3rd June 2021
Manufacturing takes a hit, recovery ahead likely to be gradual The drop in India’s manufacturing PMI to a ten-month low in May suggests that activity has taken a hit from the second virus wave despite the sector being largely exempt from containment …
1st June 2021
Solid Q1 gives way to Q2 contraction The smaller than expected rise in Indian GDP in Q1 will be followed by a significant contraction in Q2 caused by the virus surge and tightening of containment measures. While the real-time activity data have bottomed …
31st May 2021
Fuel-driven rise in headline WPI inflation will be short-lived The surge in Indian wholesale price inflation in April was driven in large part by the rally in commodity prices, which we think will reverse over the coming months. That should allow the RBI …
17th May 2021
Headline inflation to remain anchored below RBI’s 6% upper limit India’s consumer price inflation dropped to a three-month low in April, adding to evidence elsewhere that the recent tightening of virus restrictions has not been as economically disruptive …
12th May 2021
Limited economic impact so far, but more to come still India’s PMI readings for April suggest that economic activity has held up fairly well despite the latest set of containment measures. But with virus cases still extremely high, tighter and …
5th May 2021