Monthly statistical e-bulletin comprising a quick review of the economy and about 30 tables and some charts with the latest available economic/financial market indicators, both Indian and Global.
2. E-UpDates April 2017
Surge Research Support
2
A Quick Review of the Economy
Global economic recovery continued supported by the upturn in manufacturing activity, which increased by 6%(saar)in
January recording the highest pace in five years. With continued impact of energy prices, global inflation rose to 2.3% in
January. Food prices have been firming up globally, driven by cereals. Crude prices touched a three-month low in March
on rising shale output and US inventories. Global trade growth rebounded to a high of almost 10% in January and PMI
surveys confirm continued momentum in export orders in February in both AEs and EMDEs. EME currencies initially
rose on optimism on the global outlook, but some of them have weakened in recent days with the fall in commodity
prices. The riskiest bonds outperformed sharply, with particularly strong performances coming from funds in the
emerging-markets bond and emerging-markets local-currency bond categories. The markets had widely priced in the
Fed rate hike and, as a result, yields on intermediate- and long-term bonds barely moved over the quarter after seeing a
sharp increase in the second half of 2016. The yield on the 10-year finished the quarter at 2.4%, down just a few basis
points from where it finished 2016, and with an increase in short-term yields, which are most sensitive to Fed policy, led
to a flattening of the yield curve. A gauge of globalequity price movements, the MSCI World equity index reached a High
of 453.22 and a Low of 442.23 in March.
High frequency US data indicate that the labour market, industrial production and retail sales are till catalysing a
recovery,though private consumption has slowed despite very high consumer confidence. The Fed hiked policy rates by
25 bps in March as nonfarm payroll employment increased at a brisk pace in January and February, while core PCE for
January reached 1.7%.The Euro area manufacturing PMI rose to a six-year high in March amidst improving consumer
confidence and steadily strengthening employment conditions. Inflation reached 2% in January. In Japan, nascent signs
of economic revival are evident from falling unemployment, improving business sentiment on fixed investment, and
rising exports helped by the depreciation of the yen; however, deflation risks linger.
IIP recovered in January to grow 2.7% from a contraction in the previous month, helped by a broad-based turnaround in
manufacturingas well as mining and quarrying. Capital goods production improved appreciably,although this largely
reflected the waning of unfavourable base effects. Consumer non-durables continued to contract. Thus, investment and
rural consumption demand remain muted. The output of core industries moderated in February due to slowdown in
production of all the components except coal. Core sector output slipped to a 15-month low of 1% in February 2017
compared to the 3.4% growth recorded in January and 9.4% a year earlier, pulled down by a sharp 15.8% decline in
cement output, while only Steel, Coal and Electricity output showed growth. The 77th round of the Reserve Bank’s
industrial outlook survey indicates that overall business sentiment is expected to improve in Q1 of 2017-18 on the back
of a sharp pick up in both domestic and external demand. Coincident indicators such as exports and non-oil non-gold
imports are indicative of a brighter outlook for industry, although the sizable under-utilisation of capacity in several
industries could operate as a drag on investment.
India’s trade deficit widened to US$8.89 billion for February 2017 as against US$6.57 billion in February 2016. Exports
grew 17.48% y-o-y in dollar terms (to US$24.5 billion) on the back of a 47% rise in engineering goods, however, imports
jumped 21.8% y-o-y in dollar terms (US$33.4 billion) driven by a 147% surge in gold imports. Exports of most of the key
commodities such as chemicals (11.27%), engineering goods (47.33%), ready- made garments (5.05%) and petroleum
products (27.57%) showed significant improvement.Imports of key items such as coal (32.87%), petroleum (60.02%),
chemicals (22.47%), and gold (147.6%) picked up while those of iron and steel (-12.7%), machinery (-28.84%) and
transport equipment (-15.75%) contracted.Oil imports during February, grew by 60% y-o-y to US$7681.2 million.
For the period April-February 2016-17 exports registered growth of 2.5% in dollar terms and 5.5% in rupee terms (to
US$245413.05 million or Rs. 1648743.26 crore), over the same period last year. For the period April-February 2016-17
imports declined by 3.7% in dollar terms and 0.8% in rupee terms (to US$340698.43 million or Rs. 2289598.48 crore),
over the same period last year.
Annual retail and wholesale inflation were both pushed up by fuel and food prices in February. WPI inflation shot up to a
39-month high of 6.55% (provisional), as inflation in “fuel and power” shot up by 21.02% in as against a decline of
7.06% a year ago. Inflation in manufactured commodities also rose to 3.66% from a contraction of 0.52% in February
2016. WPI inflation for December 2016 based on the final index was 3.17%, as compared with 0.61% a year ago. CPI
inflation rose to a three-month high of 3.6% in February, as prices of sugar, fruits, meat, fish, milk and processed foods
increased, generating a sizable jump in the momentum in the food group. Fuel inflation was driven by both international
crude prices, as well as, policy induced increases in prices with reduction of kerosene subsidy. Annual CPI and CFPI
inflation for January 2017 based on the final index were at 3.17% and 0.61%, respectively.
The Centre’s fiscal and revenue deficits between April and February touched Rs 6.06 lakh crore or 113.4% of Budget
estimates for 2016-17 - as against 107.1% of BE in the same period of last year. Tax revenue yielded Rs .8.85 lakh crore,
or 81.3% of the estimates. Total expenditure during the April-February period was Rs .17.53 lakh crore, or 87% of the
entire fiscal's estimate.
Overnight rates remained below the policy repo rate in March. Constant maturity yields (CMYs) of short-term GSecs
softened by over 20 bps. However, with rising inflation and inflation expectations and the neutral stance of RBI, CMYs of
long term GSecs have hardened by about 20 bps. In the First Bi-monthly Monetary Policy Statement for 2017-18 in early
April the RBI has kept the policy repo rate under the LAF unchanged at 6.25%. The policy rate corridor around the policy
repo rate has been narrowed to +/-25bps from +/- 50bps with immediate effect. Consequently, the reverse repo rate
under the LAF is at 6.0 per cent, and the marginal standing facility (MSF) rate and the Bank Rate are at 6.50 per cent.
Capital mobilisation in the primary equity market continued to show an upward trend. Total equity issues during
January 2017 was Rs. 14145 crore compared to Rs. 4581 crore in December 2016. In January 2017, Rs. 49725 crore was
raised through private placement route in the corporate bond market compared to Rs. 59,587 crore in December., also
Rs. 3768 crore was raised in January through public issues. The Sensex reached a high of 29825 and a low of 28716 in
March and closed the month at 29620 up from 28743 in the previous month. FPI and Mutual Fund investment in the
equity and debt markets remained positive in the month.
3. E-UpDates April 2017
Surge Research Support
3
Contents Page
………… 3
………… 4
………… 6
………… 7
………… 9
………… 11
………… 14
………… 17
………… 20
………… 22
………… 23
………… 24
………… 25
Special Feature — Highights of The RBI's First
Bi-monthly Monetary Policy Statement, 2017-18
Table of Contents
1. Key Rates to Remember
2. Indian Economy — Growth Indicators
3. Indian Economy — Price Indicators
4. Indian Economy — Banking Indicators
10. Global Economy — Economic Indicators
11. Global Economy — Stock Indices
12. Global Economy — Commodity Indices
5. Indian Economy — Exchange Rates
6. Indian Economy — Interest Rates
7. Indian Economy — Stock Markets
8. Indian Economy — Capital Flows
9. Indian Economy — Commodity Markets
www.ecofin-surge.co.in
4. E-UpDates April 2017
Surge Research Support
4
For more click:
http://www.ecofin-surge.co.in/terminology.html
2016-17* 7.20% Jan-17 2.70%
2015-16* 7.70% Jan-16 -1.60%
As on 31-Mar-17 31-Mar-16 As on 31-Mar-17 31-Mar-16
Repo rate 6.25% 6.75% CRR 4.00% 4.00%
Reverse repo rate 5.75% 5.75% Base rate 9.25-9.65% 9.30-9.70%
MSF rate 6.75% 7.75% CMR 5.90-12.00% 5.00-9.50%
Inflation CPI-C* CFPI-C* WPI
Feb-17 3.65% 2.01% 6.55% Mar-17 50.91
Feb-16 5.26% 5.30% -0.85% Mar-16 37.34
*Base: 2012=100 US$ per barrel
March
52.5 31-Mar-17 64.84
51.5 31-Mar-16 66.33
Rural Urban All India
95.81 91.86 94.01
99.82 95.18 98.24
*30-Days Moving Average
Consumer Sentiment Index*
GDP IIP
Base : 2004-05=100.
Oil Price (World Average)
Purchasing Managers Index US$/Rupee Rate
*April-December; New Series (at
2011-12 prices).
Nikkei Markit Mnfg. PMI
Nikkei Markit Services BAI
RBI Reference rate
31-Mar-17
31-Mar-16
http://www.ecofin-surge.co.in/index.html
For explanations click:
5. E-UpDates April 2017
Surge Research Support
5
GDP Growth Rates
(at 2011-12 prices)
Q1 Q2 Q3 Q4 FY
2016-17 7.2 7.4 7.0 7.1 (2nd AE)
2015-16 7.5 7.6 7.2 7.9 7.6 (PE)
GVA at Basic Price by Economic
Activity
1 Agriculture, forestry & fishing 5,41,851 6.0 5,11,002 -2.2
2 Mining & quarrying 89,684 7.5 83,445 13.3
3 Manufacturing 4,75,618 8.3 4,39,181 12.8
4 Electricity, gas, water supply &
other utlility services
59,435 6.8 55,662 4.1
5 Construction 2,18,466 2.7 2,12,761 3.2
6 Trade, hotels, transport,
communication and services related
to broadcasting
5,15,009 7.2 4,80,428 9.6
7 Financial, real estate & professional
services
5,23,081 3.1 5,07,168 10.4
8 Public administration, defence and
Other Services
3,78,944 11.9 3,38,722 7.5
9 GVA at basic prices (1 to 8) 28,02,089 6.6 26,28,370 7.0
Estimates of Final Expenditures
on GDP
10 Private final consumption 17,78,353 ` (58.7) 16,15,790 ` (57.1)
11 Government final consumption 3,16,595 ` (10.5) 2,64,070 ` (9.3)
12 Gross fixed capital formation
(GFCF)
8,79,763 ` (29.1) 8,49,912 ` (30.0)
13 Changes in stocks (CIS) 73,070 ` (2.4) 61,988 ` (2.2)
14 Valuables 28,079 ` (0.9) 45,574 `(1.6)
15 Exports 5,99,231 ` (19.8) 5,79,567 `(20.5)
16 Less (-) Imports 6,40,432 ` (21.2) 6,12,954 ` (21.7)
17 Discrepancies (GDP less 10 to 16) -6767 - `(-0.2) 26,813 `(0.9)
18 GDP (10 to 17) 30,27,893 7.0 (100.0) 28,30,760 7.9 (100.0)
Growth Indicators
YoY Growth
(Share in
GDP) (%)
GDP
[at Constant(2011-12) prices]
2016-17
Q3
Rs.Crore YoY Growth
(Share in
GDP) (%)
2015-16
Q3
Rs.Crore
6. E-UpDates April 2017
Surge Research Support
6
1 GVA at basic prices 111,68,315 6.7 104,69,720 7.8
2 Net Taxes 9,97,166 12.3 8,87,809 9.2
3 GDP (1+2) 121,65,481 7.1 113,57,529 7.9
4 Net Domestic Product (GDP less
Consumption of Fixed Capital)
108,03,651 7.2 100,80,883 8.0
5 Net factor income from abroad -1,37,347 -1,34,596
6 Gross National Income (4+6) 120,28,134 7.2 112,22,933 7.9
7 Net National Income (GNI less
Consumption of Fixed Capital)
106,66,303 7.2 99,46,287 8.0
8 Population (in million) 1,299 1.2 1,283 1.3
9 Per capita GDP (Rs.) 93,653 5.8 88,523 6.6
10 Per capita GNI (Rs.) 92,595 5.9 87,474 6.6
11 Per capita NNI (Rs.) 82,112 5.9 77,524 6.6
12 Per capita PFCE (Rs.) 52,545 5.9 49,618 6.0
AE : Advance Estimates; PE : Provisional Estimates; RE : Revised Estimates.
Index of Industrial Production Jan-17 Jan-16 Jan-17 FY2016-17* FY2015-16*
General Index 191.3 186.2 2.7 0.6 2.7
1. Mining 146.1 138.8 5.3 1.4 2.1
2. Manufacturing 199.2 194.8 2.3 -0.2 2.5
3. Electricity 195.6 188.3 3.9 5.0 4.7
*April-January.
Index 2004-05 =100 Change (YoY, %)
Rs.Crore YoY Growth
(%)
GDP
[at Constant(2011-12) prices]
2016-17
(2nd AE)
Rs.Crore YoY Growth
(%)
2015-16
(1st RE)
126.5
129.3
128.4
186.0
189.8
187.3
178.6
188.6
198.0
176.8
181.1 180.0
100
110
120
130
140
150
160
170
180
190
200
210
2014-15 2015-16 2016-17
IIP-Annual Averages (Base : 2004-05=100) Mining &
Quarrying
(141.75)
Manufacturing
(755.27)
Electricity (103.16)
General Index
(1000.0)
7. E-UpDates April 2017
Surge Research Support
7
Wholesale Price Index
(Base: 2004-05=100)
(Inflation %)
All
Commodities
Primary Articles Food Articles Non-food
Articles
Crude
Petroleum
Manufactured
Products
December– 2016 182.8 (3.39) 256.3 270.1 225.6 189.7 158.0
January– 2017 184.6 (5.25) 255.7 267.2 231.3 182.3 158.8
February– 2017 185.5 (6.55) 258.1 267.5 234.8 205.4 158.8
Consumer Price Index
(Inflation %)
All India
General Index
(All Groups
combined)
Base 2010=100
Rural Areas (All
Groups) Base
2010=100
Urban Areas
(All Groups)
Base 2010=100
Industrial
Workers Base
2001=100
Rural
Labourers
Base 1986-
87=100
Agricultural
Labourers
Base 1986-
87=100
December– 2016 130.4 (3.41) (F) 132.8 (3.83) (F) 127.6 (2.90) (F) 275 (2.23) 881 (2.80) 876 (2.70)
January– 2017 130.3 (3.17) (F) 132.4 (3.36) (F) 127.8 (2.90) (F) 274 (1.86) 876 (2.58) 870 (2.47)
February– 2017 130.6 (3.65) (P) 132.6 (3.67) (P) 128.2 (3.55) (P) 274 (2.62) 874 (2.94) 869 (3.08)
Price Indicators
Build up of inflation in the financial year so far is 5.82% compared to a build up of -1.14% in the corresponding period of the previous year.
F: Final; P: Provisional.
180.2
181.7
182.6
184.6
185.7
185.0
183.9
181.5
179.8
178.3
175.8
176.1
176.0
177.7
178.6
177.5
176.7
176.6
176.7
177.6
177.4
175.7
174.0
174.6
177.0
179.4
182.0 183.9 183.1 182.8 182.9 183.1 182.8 184.6 185.5
120
130
140
150
160
170
180
190
200
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
WPI (Base 2004-05=100) New Series
2014-15 2015-16 2016-17
CPI Inflation –February 2017 Rural Urban Combined
Cereals & Pdcts. 4.88 6.41 5.30
Pulses & Pdcts. -3.56 -18.88 -9.02
Oils etc 3.04 5.44 3.83
Meat & Fish 3.52 3.48 3.50
Milk & Pdcts. 4.97 3.01 4.22
Vegetables -9.01 -6.97 -8.29
Food & Beverages 2.61 2.32 2.46
Fuel & Light 4.47 2.76 3.90
Clothing etc 5.10 3.19 4.38
8. E-UpDates April 2017
Surge Research Support
8
March 31, 2016 January 2017 February 2017
Reserve Money : 21,80,740 14,97,170 16,46,070
% change during the month 4.29 9.95
% change since March 31 (31.35) (24.52)
(A) Components of Reserve Money (1+2+3)
1 Currency in circulation 16,63,460 10,16,720 11,64,150
% change during the month 8.35 14.50
% change since March 31 (38.88) (30.02)
2 Banker's deposits with RBI 5,02,560 4,65,110 4,66,140
% change during the month (3.30) 0.22
% change since March 31 (7.45) (7.25)
3 "Other" deposits with RBI 15,080 15,340 15,770
% change during the month (5.43) 2.80
% change since March 31 1.72 4.58
(B) Sources of Reserve Money (4+5+6+7-8)
4 Net RBI credit to Government 4,25,330 2,10,250 5,45,690
% change during the month 301.85 159.54
% change since March 31 (50.57) 28.30
5 RBI credit to Banks & Commercial Sector 3,04,540 (2,47,100) (4,40,740)
% change during the month 75.30 78.37
% change since March 31 (181.14) (244.72)
5.1 RBI credit to banks(including NABARD) 2,84,450 (2,51,900) (4,45,350)
% change during the month 71.52 76.80
% change since March 31 (188.56) (256.57)
5.2 RBI credit to Commercial Sector 20,090 4,800 4,610
% change during the month (18.64) (3.96)
% change since March 31 (76.11) (77.05)
6 Net Foreign Exchange Assets of RBI 23,83,480 24,65,950 24,27,310
% change during the month 0.65 (1.57)
% change since March 31 3.46 1.84
7 Govt's Currency Liabilities to the Public 21,910 24,620 24,620
% change during the month - -
% change since March 31 12.37 12.37
8 Net Non-monetary Liabilities of RBI 9,54,170 9,56,510 9,10,810
% change during the month 0.63 (4.78)
% change since March 31 0.25 (4.54)
Note: (i) Figures in parentheses denote negative numbers.
Banking Indicators
COMPONENTS & SOURCES OF RESERVE MONEY AND THEIR VARIATIONS (Rs. crore)
9. E-UpDates April 2017
Surge Research Support
9
March 31, 2016 January 2017* February 2017#
M3 116,54,340 121,56,100 123,08,280
% change during the month 0.92 1.25
% change since March 31 4.31 5.61
(A) Components of M3 ( 1+2+3+4)
1 Currency with the public 15,98,100 9,12,680 10,63,530
% change during the month 16.58 16.53
% change since March 31 (42.89) (33.45)
2 Demand deposits with banks 9,97,020 11,77,810 11,79,870
% change during the month (1.86) 0.17
% change since March 31 18.13 18.34
3 Time deposits with banks 90,43,770 100,50,080 100,49,250
% change during the month 0.03 (0.01)
% change since March 31 11.13 11.12
4 Other deposits with RBI 15,450 15,530 15,630
% change during the month 1.77 0.64
% change since March 31 0.52 1.17
(B) Sources of M3 (5+6+7+8-9)
5 Net bank credit to govt.(i+ii) 32,41,030 39,29,350 40,41,240
% change during the month 3.05 2.85
% change since March 31 21.24 24.69
i RBI's credit 4,25,000 1,39,080 4,92,170
% change during the month 3,700.00 253.88
% change since March 31 (67.28) 15.80
ii Other banks' credit 28,16,030 37,90,260 35,49,070
% change during the month (0.50) (6.36)
% change since March 31 34.60 26.03
6 Bank credit to commercial sector (i+ii) 78,21,910 79,67,160 80,46,290
% change during the month 0.93 0.99
% change since March 31 1.86 2.87
i RBI's credit 20,080 4,940 4,770
% change during the month (9.19) (3.44)
% change since March 31 (75.40) (76.25)
ii Other banks' credit 78,01,830 79,62,220 80,41,520
% change during the month 0.94 1.00
% change since March 31 2.06 3.07
7 Net foreign exchange assets of the banking sector 24,90,710 26,44,410 26,21,840
% change during the month 1.93 (0.85)
% change since March 31 6.17 5.26
8 Government's currency liabilities to the public 21,910 24,620 24,620
% change during the month 5.80 0.0
% change since March 31 12.37 12.4
9 NNML of the banking sector (i+ii) 19,21,210 24,09,430 24,25,710
% change during the month 5.70 0.68
% change since March 31 25.41 26.26
i RBI's NNML 9,54,170 9,48,270 9,19,300
% change during the month 0.14 (3.06)
% change since March 31 (0.62) (3.65)
ii Other bank's NNML(Residual) 9,67,040 14,61,160 15,06,410
% change during the month 9.65 3.10
% change since March 31 51.10 55.78
COMPONENTS & SOURCES OF MONEY STOCK (M3) AND THEIR VARIATIONS (Rs. crores)
Note: (i) Figures in parentheses denote negative numbers; (ii) *: Data are of January 20, 2017; (iii) #
: Data are of February
17, 2017.
23. E-UpDates April 2017
Surge Research Support
23
http://www.ecofin-surge.co.in/
Stock
Market
Country Risk
Indicator/
Country
(per US$)
Q4 February
USA 2.0 Feb 0.5 2.7 4.0 1.15 2.34 Feb -754.8 118.3 5.1 AA+/Stable
Canada 1.9 Jan 3.5 2.0 3.5 0.89 1.56 1.34 Feb -17.8 82.1 2.3 AAA/Stable
UK 1.9 Jan 3.2 2.3 3.7 0.33 1.06 0.71 Jan -181.4 142.3 3.6 AA/-ve
Euro area 1.7 Jan 0.6 2.0 4.5 -0.33 0.25 0.94 Jan 295.4 344.7 7.1 (EU)AA/Stable
Germany 1.8 Jan 0.0 2.2 3.1 -0.33 0.28 0.94 Jan 281.1 184.7 7.6 AAA/Stable
France 1.1 Jan -0.4 2.2 3.9 -0.33 0.95 0.94 Jan -59.2 5.9 AA/Stable
Italy 1.0 Jan -0.5 1.6 3.7 -0.33 2.28 0.94 Jan 56.4 6.4 BBB-/Stable
Spain 3.0 Jan 7.2 3.0 7.3 -0.33 1.64 0.94 Jan -21.4 12.3 BBB+/+ve
Russia 0.3 Feb -2.7 4.6 15.1 11.3 8.13 56.2 Jan 94.2 397.3 0.0 BB+/+ve
Japan 1.6 Feb 4.8 0.2 1.0 0.04 0.07 111.00 Jan 45.3 1232.3 3.5 A+/ Stable
China 6.8 Feb 6.3 0.8 7.8 4.32 3.12 6.90 Feb 467.9 3005.0 6.2 AA-/-ve
Hong Kong 3.1 Q4 -0.7 -0.1 0.92 1.61 7.77 Feb -56.8 390.5 10.7 AAA/-ve
Malaysia 4.5 Jan 3.5 4.5 3.43 4.12 4.43 Feb 21.1 95.0 7.6 A-/Stable
Singapore 2.9 Feb 12.6 0.7 .. 2.22 1.40 Feb 48.1 253.2 13.7 AAA/Stable
South Korea 2.4 Feb 6.6 1.9 4.2 1.40 2.14 1124.00 Mar 84.3 373.9 14.5 AA/Stable
Taiwan 2.9 Jan 2.8 -0.1 0.66 1.11 30.4 Feb 15.6 437.7 14.2 AA-/Stable
Thailand 3.0 Feb -1.5 1.4 1.35 2.59 34.5 Feb 17.9 183 6.3 BBB+/Stable
Brazil -2.5 Feb -0.8 4.8 10.9 9.8 3.09 Mar 53.7 369.0 13.1 BB/-ve
Chile 0.5 Feb -7.6 2.7 0.40 3.98 657.00 Feb 4.6 39.7 19.8 AA-/ -ve
Mexico 2.4 Jan -0.1 4.9 6.84 7.06 18.70 Feb -11.7 175.0 18.6 BBB+/-ve
South Africa 0.7 Jan 0.5 6.3 5.6 7.36 8.99 13.80 Feb 1.2 46.7 3.9 BB+/-ve
India 7.0 Jan 2.7 3.7 6.6 5.75 6.65 64.9 Feb -100.8 362.8 17.7 BBB-/Stable
Note: Trade balance for last 12 months. FX Reserves at end of period.
*Per cent change of the major index in US$ terms between December 30, 2016 and April 5, 2017. **Foreign Currency Ratings by S&P.
(% change on year ago) (%) (US$ bn.)
FX
Reserves
Economic & Financial Market Indicators for Major Global Economies
Growth Inflation Interest Rates External Sector
Global Economic Indicators
February 05-Apr
GDP Short-
term
Rate
Long-
term
Rate
Exchange
Rate
Trade BalanceIIP CPI PPI Share
Price
Growth*
Sovereign
Rating**
For more Countrywise Indicators and Updates visit:
3.2 3.1
3.4 3.6
2.8 2.9
3.3 3.3
2.7
1.9
3.8
4.1
1.8
2.3
2.8
3.3
3.8
2015 2016 2017 2018
World Output, Inflation& Trade (% change, IMF, WEO Database & Updates)
GDP Inflation Trade
25. E-UpDates April 2017
Surge Research Support
25
Units Descriptor Jan-16 Feb-16 Mar-16 Jan-17 Feb-17 Mar-17
Index Number Fuel and Non-Fuel 83.20 83.98 92.39 117.14 118.71 114.16
Index Number Non-Fuel 121.80 121.44 128.09 143.33 145.25 142.73
Index Number Food 134.10 135.12 139.77 152.31 151.82 147.62
Index Number Agricultural Raw Materials 110.80 100.74 111.13 120.13 120.68 120.45
Index Number Industrial Inputs 106.93 105.55 114.20 133.54 138.22 137.27
Index Number Metals 104.13 109.03 116.42 143.21 150.89 149.42
Index Number Energy 60.61 62.07 71.50 101.82 103.18 97.44
Index Number Crude Oil 56.05 58.32 70.06 100.85 102.22 95.77
USD per Barrel Crude Oil, Brent 30.80 33.20 39.07 54.89 55.49 51.97
USD per Barrel Crude Oil Dubai Fateh 27.25 29.61 35.17 53.43 54.17 51.16
USD per Barrel Crude Oil WTI 31.70 30.35 37.77 52.56 53.40 49.58
USD per Million Metric British
Thermal Unit
Natural Gas, H H, Louisiana 2.27 1.96 1.70 3.26 2.82 2.87
USD per Metric Ton Coal, Australian Thermal 53.37 54.33 55.92 89.71 86.15 86.37
USD per Metric Ton Aluminum 1481.10 1531.26 1531.01 1791.24 1860.75 1901.47
USD per Metric Ton Copper 4471.79 4598.62 4953.80 5754.56 5940.91 5824.63
USD per Metric Ton Zinc 1520.36 1709.85 1801.69 2714.80 2845.55 2776.88
US Cents per Metric Ton Iron Ore 42.20 46.49 56.54 80.82 88.80 87.20
US cents per Pound Rubber 55.33 57.04 65.64 115.90 122.99 107.35
US cents per Pound Cotton 68.75 66.57 65.46 82.33 85.16 86.78
USD per Metric Ton Palm oil 531.62 595.90 633.07 726.49 706.79 663.30
USD per Metric Ton Sunflower Oil 1020.14 1039.58 1013.92 980.86 966.97 936.78
USD per Metric Ton Soybean Oil 659.90 686.90 713.86 771.88 742.92 723.40
USD per Metric Ton Soybeans 323.20 320.13 326.94 379.59 380.87 366.10
US cents per Pound Sugar, European 23.95 23.77 23.66 20.53 20.76 20.51
US cents per Pound Sugar, Free Market 14.36 14.01 15.95 20.54 20.35 18.06
US cents per Pound Sugar, U.S. 25.52 25.46 25.89 29.01 30.40 29.83
US cents per Kg. Tea 319.83 287.26 263.71 368.73 382.87 356.10
US cents per Pound Coffee, Arabicas 146.32 148.94 156.94 167.83 165.56 159.39
USD per Metric Ton Rice, Bangkok 359.48 373.19 370.48 372.55 368.50 367.78
USD per Metric Ton Wheat, US 164.56 159.25 164.03 137.09 147.31 146.39
*Base 2005=100
Primary Commodity Indices*/ Prices
Global Commodity Prices
0 50 100 150 200
2015
2016
2017
2018
Observed& ProjectedPrice Movements, IMF WEO Database Fuel and Non-Fuel Price Indices
Food Price Index includes Cereal, Vegetable
Oils, Meat, Seafood, Sugar, Bananas, and
Oranges
Industrial Inputs Price Index includes
Agricultural Raw Materials and Metals
Agricultural Raw Materials Index includes
Timber, Cotton, Wool, Rubber, and Hides
Price
Crude Oil Index(Petroleum), Brent, West
Texas Intermediate, and the Dubai Fateh
Metals Price Index, Copper, Aluminum, Iron
Ore, Tin, Nickel, Zinc, Lead,and Uranium
Price Indices
26. E-UpDates April 2017
Surge Research Support
26
Following are the Highlights of RBI’s First Bi-monthly Monetary Policy Statement, 2017-18:
Policy Measures
The Monetary Policy Committee (MPC) decided to keep the policy repo rate under the liquidity adjustment facility
(LAF) unchanged at 6.25%.
With a view to ensuring finer alignment of the weighted average call rate (WACR), the operating target of monetary
policy, with the repo rate it has been decided to further narrow the policy rate corridor around the policy repo rate to +/-
25bps from +/- 50bps with immediate effect. Consequently, the reverse repo rate under the LAF is at 6.0%, and the
marginal standing facility (MSF) rate and the Bank Rate are at 6.50%.
The decision of the MPC is consistent with a neutral stance of monetary policy in consonance with the objective of
achieving the medium-term target for consumer price index (CPI) inflation of 4% within a band of +/- 2%, while
supporting growth.
Assessment
Indicators of global growth suggest signs of stronger activity in most AEs and easing of recessionary conditions in commodity
exporting large emerging market economies (EMEs). For EMEs, the outlook is gradually improving, with indications that the
slowdown characterising 2016 could be bottoming out. Inflation is edging up in AEs to or above target levels on the back of
slowly diminishing slack, tighter labour markets and rising commodity prices. Among EMEs, there is a generalised softening of
inflation pressures.
International financial markets have been impacted by policy announcements in major AEs, geo-political events and country-
specific factors. Equity markets in AEs were driven up by reflation trade, stronger incoming data and currency movements.
Equity markets in EMEs had a mixed performance, reflecting domestic factors amidst a cautious return of investor appetite and
capital flows.
The CSO released its second advance estimates for 2016-17 on February 28, placing India’s real GVA growth at 6.7% for the
year, down from 7% in the first advance estimates released on January 6. Agriculture expanded robustly; in the industrial sector,
there was a significant loss of momentum across all categories, barring electricity generation; and the services sector also slowed,
pulled down by most categories of services.
Several indicators are pointing to a modest improvement in the macroeconomic outlook. Foodgrains production has touched an
all-time high. Industrial output, measured by the index of industrial production (IIP), recovered in January from a contraction in
the previous month, helped by a broad-based turnaround in manufacturing as well as mining and quarrying. The manufacturing
purchasing managers’ index (PMI) remained in expansion mode in February and rose to a five month high in March on the back
of growth of new orders and output. The 77th round of the Reserve Bank’s industrial outlook survey indicates that overall
business sentiment is expected to improve in Q1 of 2017-18 on the back of a sharp pick up in both domestic and external
demand. Coincident indicators such as exports and non-oil non-gold imports are indicative of a brighter outlook for industry,
although the sizable under-utilisation of capacity in several industries could operate as a drag on investment.
After moderating continuously over the last six months to a historic low, retail inflation measured by year-on-year changes in
the CPI turned up in February to 3.7%. While food prices bottomed out at the preceding month’s level, base effects pushed up
inflation in this category. Fuel inflation increased as the continuous hardening of international prices lifted domestic prices of
petroleum. Kerosene prices have also been increasing since July with the programmed reduction of the subsidy. Both three
months ahead and a year ahead households’ inflation expectations, reversed in the latest round of the Reserve Bank’s
survey. The 77th round of the Reserve Bank’s industrial outlook survey indicates that pricing power is returning to corporates as
profit margins get squeezed by input costs. Excluding food and fuel, inflation moderated in February by 20 basis points to 4.8%,
essentially on transient and specific factors in items like clothing and gold.
With progressive remonetisation, the surplus liquidity in the banking system declined from a peak of Rs.7,956 billion on January
4, 2017 to an average of Rs. 6,014 billion in February and further down to Rs. 4,806 billion in March. Currency in circulation
27. E-UpDates April 2017
Surge Research Support
27
expanded during this period. Its impact on the liquidity overhang was, however, partly offset by a significant decline in cash
balances of the Government up to mid-March which released liquidity into the system. Thereafter, the build-up of Government
cash balances on account of advance tax payments and balance sheet adjustment by banks reduced surplus liquidity to Rs. 3,141
billion by end-March. Issuances of cash management bills (CMBs) under the MSS ceased in mid-January and existing issues
matured, with the consequent release of liquidity being absorbed primarily through variable rate reverse repo auctions of varying
tenors. Accordingly, the average net absorption by the Reserve Bank increased from Rs. 2,002 billion in January to Rs. 4,483
billion in March. The weighted average call money rate (WACR) remained within the LAF corridor. The maturing of CMBs and
reduced issuance of Treasury bills leading up to end-March has also contributed to Treasury bill rates being substantially below
the policy rate.
Merchandise exports rose strongly in February 2017 from a subdued profile in the preceding months. Growth impulses were
broad-based. The surge in imports in January and February 2017 largely reflected the effect of the hardening of commodity
prices such as crude oil and coal. With imports outpacing exports, the trade deficit widened in January and February from its
level a year ago, though it was lower on a cumulative basis for the period April-February 2016-17. Balance of payments data for
Q3 indicate that the current account deficit for the first three quarters of the financial year narrowed to 0.7% of GDP, half of its
level a year ago. For the year as a whole, the current account deficit is likely to remain muted at less than 1% of GDP.
Foreign direct investment (FDI) has dominated net capital inflows during April-December, with manufacturing, communication
and financial services being the preferred sectors. FPI flows turned positive in February and welled up into a surge in March,
especially in debt markets. This reversal appears to have been driven by stable domestic inflation, better than expected domestic
growth, encouraging corporate earnings, clarity on FPI taxation, pro-reform budget proposals and state election results. The level
of foreign exchange reserves was US$369.9 billion on March 31, 2017.
Outlook
GVA growth is projected to strengthen to 7.4% in 2017-18 from 6.7% in 2016-17, with risks evenly balanced. The pace of
remonetisation will continue to trigger a rebound in discretionary consumer spending. Significant improvement in transmission
of past policy rate reductions into banks’ lending rates post demonetisation should help encourage both consumption and
investment demand of healthy corporations. Various proposals in the Union Budget should stimulate capital expenditure, rural
demand, and social and physical infrastructure all of which would invigorate economic activity. The imminent materialisation of
structural reforms in the form of the roll-out of the GST, the institution of the Insolvency and Bankruptcy Code, and the abolition
of the Foreign Investment Promotion Board will boost investor confidence and bring in efficiency gains. The upsurge in IPOs in
the primary capital market augurs well for investment and growth. External demand should support domestic growth. Downside
risks to the projected growth path stem from the outturn of the south west monsoon; ebbing consumer optimism on the outlook
for income, the general economic situation and employment as polled in the March 2017 round of the Reserve Bank’s consumer
confidence survey; and, commodity prices, other than crude, hardening further.
Headline CPI inflation is set to undershoot the target of 5.0% for Q4 of 2016-17 in view of the sub-4% readings for January and
February. For 2017-18, inflation is projected to average 4.5% in the first half of the year and 5% in the second half. Aggregate
demand pressures could build up, with implications for the inflation trajectory.
Developmental and Regulatory Policies
The RBI also sets out new measures for further refining the liquidity management framework (Management of Surplus
Liquidity, Narrowing of the Monetary Policy Rate Corridor, Substitution of Collateral under the LAF Term Repos);
strengthening the banking regulation and supervision (Revised Prompt Corrective Action (PCA) Framework for Banks, Raising
the Minimum Level of Net Owned Funds for ARCs, Partial Credit Enhancement, Banking Outlets in underserved areas, banks’
participation in Real Estate Investment Trust (REITS) and Infrastructure Investment Trusts, Countercyclical Capital Buffer);
broadening and deepening financial markets (Draft Guidelines on Simplified Hedging Facility for Forex Exposure, Introduction
of Tri-party Repo, Introduction of Additional Settlement Batches for NEFT, Merchant Discount Rate rationalization, Issuance
and Operation of Pre-paid Payment Instruments); and extending the reach of financial services by enhancing the efficacy of the
payment and settlement systems (Pilot Project on Financial Literacy).
28. E-UpDates April 2017
Surge Research Support
28
E-UpDates Subscription (Renewal) form
One year subscription: Rs. 3600.00 Back issue: Rs. 150.00 (per issue)
SUBSCRIBER INFORMATION
(Please complete the form clearly to receive information and offerings from Ecofin-Surge)
Subscription for……………………………. Subscription Number……………..…………
(New subscription or Renewal or Back issue) (for renewal)
Issues from……………………………………………….. to ……………………………………………….
(please specify for Back issues)
Name ………………………………………………………………………………………
Organization ………………………………………………………………………………
Address1…………………………………………………………………………………...
Address2…………………………………………………………………………………...
City…………………………………………….. State ……………………………………
Pin……………………..Phone………………….…… Email…………………………….
PAYMENT INFORMATION
Cheque (in favour of SURGE RESEARCH SUPPORT)
Cheque Number …………………. Bank ………..……………………..
Date………………………….. Amount……………
OR
Bank Transfer (made payable to SURGE RESEARCH SUPPORT)
Bank Name: Axis Bank
Branch: Rashbehari Avenue, Kolkata
A/C Number: 911020021891851 IFS Code: UTIB0000253
Date………………………….. Amount……………
Please complete this page and mail (/email) it to:
Sakuntala Sarkar
For: Surge Research Support
772, R.N. Tagore Road
Kolkata 700 077
West Bengal, INDIA
Email: ecofin.surge@gmail.com
29. E-UpDates April 2017
EUpDates
April 2017
A Monthly Statistical Bulletin
2017
Surge Research Support
29
EUpDates
April 2017
A Monthly Statistical Bulletin
To subscribe visit
www.ecofin-surge.co.in/kiosk.html
or email
ecofin-surge@gmail.com
Rs. 3600.00 (12 Issues)
Surge Research Support
www.ecofin
Surge Research Support
Surge Research Support
www.ecofin-surge.co.in
12/4/2017