Debt Market Update


Debt Market Update

  • Retail inflation (CPI) rose to a 14-month high of 6.21% in October 2024, surpassing the RBI’s upper tolerance band. Nationally, urban inflation stood at 5.62%, while rural inflation climbed to 6.68%. Food prices, especially a 42.18% surge in vegetable costs, drove the rise, highlighting a significant year-on-year momentum in inflation.
  • Wholesale Price Index (WPI) inflation rate increased to 2.36% in October 2024, up from 1.84% in September 2024. The rise was seen primarily driven by higher prices in food articles, manufactured products, machinery, motor vehicles, and textiles, indicating a moderate inflationary trend in the Indian economy.
  • India's GDP growth decelerated to 5.4% in Q2 FY25, marking the lowest level in seven quarters. Economic slowdown was triggered owing to factors like: - Mining contracted for the first time in two years, Manufacturing growth drastically slowed to 2.2% from 7%, Private consumption declined from 7.4% to 6%, Exports declined to 2.8% from 8.6%, Agricultural sector showed resilience, growing 3.5%, Services sector maintained steady growth at 7.1%.
  • India's industrial growth rebounded to 3.1% in September 2024, recovering from a 22-month low of -0.1% in August 2024. The manufacturing sector, which carries two-thirds weight in the IIP, grew to 3.9% from 1.1%. Core sector growth increased to 3.1% in October 2024, up from 2.4% (revised) in September 2024, with four out of eight sectors showing improved performance. This marks the second consecutive month of growth and the first sequential rise since May 2024, following a 1.6% contraction in August.
  • Gross GST collections amounted to Rs 1.82 lakh crore in November 2024 (Rs 1.87 lakh crore in October 2024), reflecting an 8.5% YoY growth but a 2.7% decline from October 2024. This marks the ninth consecutive month with collections exceeding ₹1.7 lakh crore. For the April-November 2024 period, net collections grew 9.2% to Rs 12.91 lakh crores. India's merchandise trade deficit expanded to USD27.14bn in October 2024, increasing from USD20.78bn in September 2024. Exports rose to USD39.2bn, while imports grew more substantially to USD66.34bn, exceeding economists' projections. Services exports also increased to USD34.02bn, though services imports grew to USD17bn. The overall trade deficit, combining merchandise and services, narrowed to USD10.12bn compared to the previous year.

Source: RBI, Bloomberg, CCIL, MOSPI
*BE - Budget Estimates

Past performance may or may not be sustained in future and is not a guarantee of any future returns, and should not be used as a basis of comparison with other investments. Index performance does not signify scheme performance Investors should consult their financial advisers if in doubt about whether the product is suitable for them.

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