Debt Market Update
- Retail inflation (CPI) rose to 7% in August 2022, from a 5-month low of 6.71% in July 2022. This is a departure from a 3-month downtrend in CPI. CPI has remained higher than the RBI’s upper tolerance limit the whole year. Food inflation, accounting for nearly half the CPI, hardened considerably as prices of wheat, rice and pulses rose owing to a record heatwave.
- Wholesale price-based inflation (WPI) eased to 12.41% in August 2022 (13.93% in July 2022). WPI remained in double digits for the 17th consecutive month owing to rise in prices of mineral oils, food articles, crude petroleum & natural gas, basic metals, chemicals & chemical products, electricity, food products.
- The country’s industrial output (IIP) slowed to a four-month low of 2.4% in July 2022 (12.3% in June 2022). IIP made the most of gains in manufacturing (3.2%) and power generation (2.3%) even as mining contracted (3.3%).
- India’s exports slowed down to USD33.0bn in August 2022 (USD36.3bn in July 2022). Amongst the major products, exports of electronic goods (50.7%), rice (42.3%), organic and inorganic chemicals (13.4%) posted robust growth in August 2022. Total merchandise exports over the April-August 2022 period rose to 17.1% year-on-year. India’s merchandise imports in August 2022 were USD61.7bn (USD66.3bn in July 2022). Merchandise imports over April-August 2022 were USD317.8bn, a sharp increase of 45.6% over USD218.2bn in April-August 2021. Merchandise trade deficit in August widened to USD28.0bn (USD30bn in July 2022).
- Gross GST collections surged 28% YoY to Rs 1.44 crores during August 2022 (1.49 crores in July 2022) – the sixth successive month when GST revenues have crossed the Rs 1.4 lakh crore mark, with GST collections surging 33% till August this year vis-à-vis the same period of 2021-22. However, August GST collections are 3.6% lower than July’s collection of Rs 1,48,995 crore and mark a three-month low.
