The Signal (weekly highlights)

1. India’s exports rose by 24.2% to USD 9.4 bn during 1-7 June 2022

India’s exports increased by 24.2 per cent year-on-year to USD 9.4 billion in the first week of June 2022, as against USD 7.6 billion in the same period in 2021. This comes on account of healthy growth in sectors like engineering, gems & jewellery and petroleum products.

This comes on account of healthy growth in sectors like engineering, gems & jewellery and petroleum products. Around 80% of export growth came from non-petroleum products while 80% of import growth came from natural resources such as petroleum, coal and gold.

2. E-way bill generation at 73.6 mn in May 2022

E-way bill generation for inter-state trade under the Goods and Services Tax (GST) system at 73.6 million in May 2022 was lower by two per than in April 2022.

This was significantly higher by 84 per cent when compared with the year-ago month due to a very low base. Monthly gross GST collections came in at about Rs.1.4 trillion in May, reflecting a four per cent month-on-month decline in e-way bills in April 2022.

3. RBI hikes repo rate by 50 bps

Withdrawal of accommodation continues as the monetary policy committee’s stance. In line, RBI increased the repo rate by the much anticipated 50-bps. Alongside, the MSF and Bank Rate have been revised upwards by 50 bps to 5.15% while the SDF is pegged at 4.65%.

The powerful rate hike dosage, while appreciable, must be quickly complemented by strong antacids that thoughtful fiscal measures are. With policies around commodities and international trade, the fiscal ball has started rolling but may not be adequate to support an economy that is diverting all its strength to barely stand.

4. RBI retains GDP growth projections for FY23 at 7.2%

The Reserve Bank of India (RBI) kept its projection for India’s real GDP growth in 2022-23 unchanged at 7.2 per cent from its last monetary policy review in April 2022. It expects GDP to grow year-on-year by 16.2 per cent in the first quarter, 6.2 per cent in the second quarter, 4.1 per cent in the third quarter and 4.0 per cent in the last quarter, with risks broadly balanced.

RBI is optimistic on the investment demand front. It, however, expects prolonged geopolitical tensions, elevated commodity prices, continued supply bottlenecks and tightening global financial conditions to cast a negative impact on India’s growth prospects. 

5. Indian makes a case for rating upgrade

India has made a strong case for a sovereign rating upgrade before international rating agencies, including S&P Global Ratings, Fitch and Moody’s. During the meetings held in April and May 2022, representatives from agencies were apprised of India’s macroeconomic indicators.

Government officials made detailed presentation to showcase the country’s economic recovery after three waves of Covid-19 pandemic, bank credit health and progress on private capex spending.