MACRO BULLETIN- MARCH 2021

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GDP

  • After two consecutive quarters of contraction, the Indian economy entered an expansionary path registering a growth rate of 0.4 percent in Q3 FY21.
  • Private Final Consumption Expenditure (PFCE) contracted 2.4 percent in the third quarter compared to a contraction of 11.3 percent in the previous quarter, reflecting the improving domestic demand in the economy.

Quarterly GDP growth rate (YoY)

Source: CMIE
  • Gross Fixed Capital Formation (GFCF), measuring investment demand, registered a growth rate of 2.5 percent in Q3 FY21.
  • In terms of Gross Value Added, the agriculture sector registered an impressive growth of 3.9 percent in the third quarter.
  • Construction sector also registered a notable growth rate of 6.23 percent in Q3FY21.

Inflation

Inflation rate (YoY)

  • Inflation rate as measured by Consumer Price Index (CPI) inched to 5.03 percent in February’21.
  • Food inflation rose to 3.87 percent in February’21 from 1.96 percent in January’21.
  • Vegetable prices registered a negative growth rate of 6.27 percent in February’21 compared to -15.84 percent in January’21.
  • Core inflation continue to remain sticky at 5.8 percent in February’21.

Industrial Output

  • Index of Industrial Production (IIP) contracted by 1.60 percent in January’21 compared to a growth of 1.56 percent in December’20.

IIP growth rate (YoY)

Source: CMIE
  • Electricity sector registered a growth rate of 5.53 percent, whereas mining &quarrying and manufacturing contracted by 3.7 percent and 2.03 percent, respectively.
  • Core sector output growth marginally declined to 0.15 percent in January’21 from 0.30 percent in December’20.
  • Manufacturing PMI stood at 57.5 in February’21.

External Sector

Exchange Rate

  • As on 19 March 2021, India’s forex reserves reached USD 582.2 billion.
  • INR strengthened against USD in February’21 at 72.76 compared to 73.11 in Janauary’21.

Foreign Trade

  • India registered a trade deficit of USD 13.02 billion in February’21.

India’s Foreign Trade

Source: CMIE

In February’21, imports registered a growth rate of 7 percent YoY whereas as exports contracted by 0.81 percent YoY

Fiscal Scenario

  • Revenue receipts of the Central government up to February’21 stood at Rs 13.7 lakh crore, which is 88.1 percent of the revised estimates for FY21
  • Revenue expenditure stood at Rs 24.1 lakh crore making it 80.1 percent of the revised estimates for FY21. Capital expenditure up to February’21 stood at Rs 4.05 lakh crore, which is 92.4 percent of the revised estimates.
  • Fiscal deficit stood at Rs 14.07 lakh crore in February’21, making it 76 percent of the revised estimates for FY21.

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