aligned fiscal and monetary policy to aid growth in the ... · aligned fiscal and monetary policy...
TRANSCRIPT
Aligned fiscal and monetary policy
to aid growth in the medium term
Bi-Monthly: India Chartbook
Treasury Research Group
For private circulation only
Yash Panjrath Anushri Bansal
[email protected] [email protected]
Tel no: +91-22-4008-8161 Tel no: +91-22-4008-6220
October 3, 2019
Introduction
2
• In the last two months, data releases have indicated the slowdown being deeply entrenched,
with growth numbers reaching several quarter lows of 5% YoY for Q1 FY2020
• At the same time policy makers, both monetary and fiscal, are showcasing their intent to tackle
the downturn, with the FM announcing substantial corporate tax cuts, while monetary policy
continues to be on its path of accommodation. We expect the MPC to cut rates in the October
policy, with expectations of the terminal rate moving to at least 5% as monetary and fiscal policy
work in tandem to boost growth
• We think the current slowdown is an interplay of cyclical, durable and structural factors
• Cyclical factors include adverse terms of trade (ToT) in rural sector, muted rural wages and
negative flow of funds from NBFCs, which we think could see reversal
• While the more durable factors of falling share of household investment and household
savings in GDP and negative credit-gap, if not reversed could lead to lowering of potential
output
• Moreover, improvement in structural factors such as health and education are important to
drive long term growth potential, especially for a young economy like India
All data in this chartbook is updated till September 30, 2019
Introduction
3
• For Indian markets, fiscal concerns at the back of fiscal stimulus soured sentiment, even while
the liquidity report was a disappointment, as it indicated a lower requirement for bond purchase
program for rest of the year and no possibility of linking monetary policy stance to the liquidity
stance. On the other hand, H2FY2020 borrowing program was kept unchanged at INR 2.68 tn.
This along with further easing by the MPC could provide relief to the markets, though sentiment
could remain cautious.
• October 1, 2019 also marks a regime shift in lending rates of banks as they will now be linked to
an external benchmark as mandated by RBI in an attempt to aid monetary policy transmission
• Given this background, while real economy data for the last couple of months indicates
continued growth weakness, we are optimistic that easing financial conditions and fiscal
stimulus, will lead to positive externalities in the H2FY2020. We also expect these to have
substantial spillovers for growth numbers in FY2021
All data in this chartbook is updated till September 30, 2019
Executive Summary
4
Consumption demand in urban areas could partly depend on flow of funds from the NBFC
sector, while rural demand could see improvement with good monsoons
Sector specific reforms, substantial corporate tax cuts and lower lending rates could help
industrial recovery in the medium term
Upward momentum in CPI inflation is driven by food inflation, with moderating core inflation
providing a ceiling to the increase
Recently announced fiscal stimulus could lead to fiscal breach, though expectations of higher
non-tax revenue receipts and expenditure savings could bridge the gap
ICICI Bank’s Research proprietary Diffusion Index shows continued slack in the economy; while
easing in its Financial Conditions Index and fiscal stimulus could lead to growth recovery over the
medium term
Q1 FY2020 BoP data saw improvement on an annual basis at the back of higher remittances and
FDI flows. We have a positive outlook to the external sector in FY2020 driven by capital inflows,
FDI flows and lower oil prices
Domestic assets seeing volatility amidst fiscal concerns, disappointing liquidity framework report
and trade wars, while expectations of further easing by MPC is providing some relief
Decoding growth slowdown - cyclical factors
Source: CEIC, RBI, ICICI Bank Research
Adverse terms of trade (ToT) in rural sector
Negative flow of funds from NBFC sectorRural wages are showing uptick, sustainability needs to be monitored
5
• Rising food inflation in tandem with falling core
inflation could lead to improvement in ToT in the
agricultural sector
• A step-up in construction activity could lead to
increase in demand for rural migrant labour. This
could have positive ramifications for rural wages
• Any targeted intervention by the government
could lead to improvement in flow of funds from
NBFCs
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
Aug
-12
Dec-1
2
Ap
r-13
Aug
-13
Dec-1
3
Ap
r-14
Aug
-14
Dec-1
4
Ap
r-15
Aug
-15
Dec-1
5
Ap
r-16
Aug
-16
Dec-1
6
Ap
r-17
Aug
-17
Dec-1
7
Ap
r-18
Aug
-18
Dec-1
8
Ap
r-19
Aug
-19
Rural: Food to Msc. Services inflation ratio
2016-17 2017-18 2018-19
A. Adjusted non-food bank Credit 4,952 9,161 12,300
B. Flow from Non-banks (B1+B2) 9,574 11,603 9,342
B1. Domestic Sources 6,789 8,219 5,474
Net Credit by housing finance companies 1,374 2,198 1,465
Total accomodation by 4 RBI - regulated
AIFIs - NABARD, NHS, SIDBI & EXIM Bank 469 950 1,136
Systemically important non-deposit taking
NBFCs (net of bank credit to NBFC's) 1,510 3,046 -397
B2. Foreign Sources 2,758 3,385 3,867
C. Total Flow of resources (A+B) 14,500 20,764 21,642
INR bn
April-March
Flow of f inancial resources to commercial sector
3.5
4.0
4.5
5.0
5.5
6.0
6.5
7.0
Ju
l-15
Jan
-1
6
Ju
l-16
Jan
-1
7
Ju
l-17
Jan
-1
8
Ju
l-18
Jan
-1
9
Ju
l-19
(3 mma, % YoY) Rural wages
Decoding growth slowdown - durable factors, if not reversed could lower
potential output
Source: CEIC, RBI, BIS, ICICI Bank Research
Falling share of household investment dragging overall investment
Falling share of household saving could lead to increased reliance on
external funds
Negative credit-gap since the beginning of 2013 could lead to more
durable slowdown
6
15.714.6
12.512.1
9.410.4 10.3
0
2
4
6
8
10
12
14
16
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18
Public Private Household(GFCF as a % of GDP)
7.2
7.2
7.2
6.9
7.9
6.2
6.5
15
.9
14
.8
12
.6
12
.2
9.7
10
.6
10
.4
0
5
10
15
20
25
20
11
-12
20
12
-13
20
13
-14
20
14
-15
20
15
-16
20
16
-17
20
17
-18
Saving in physical assets & ornaments
Net Financial Savings
Household sector(% of GNDI)
• Share of household investment in GDP has fallen from
~16% in FY2012 to ~10% in FY2018. This has led to
broad based slowdown in investment
• A decrease in household sector savings in tandem with
dis-savings by the government and muted increase in
savings by corporates could lead to increased reliance
of funds from abroad
• Negative credit-gap since the beginning of 2013 could
lead to a more durable slowdown
-15
-10
-5
0
5
10
15
Mar-91
Mar-93
Mar-95
Mar-97
Mar-99
Mar-01
Mar-03
Mar-05
Mar-07
Mar-09
Mar-11
Mar-13
Mar-15
Mar-17
Mar-19
Credit gap (actual-potential)(% of GDP)
Decoding growth slowdown - structural factors
Improvement in health and education important to drive long term growth potential, especially for a
young economy like India
7
India is one of the youngest populations in the world with ~6%
ageing population
Public spending on health and education is very low
17.6
27.4
13.1 15.018.8
25.8
71.2
66.4
65.3 64.3
65.4
65.3
11.26.2
21.7 20.815.8
8.9
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
China India Germany Euro Area USA World
Demographic profile
0-14 15-64 65 plus
Source: CEIC, World Bank, ICICI Bank Research
FY20 BE 0.76
FY19 RE 0.73
FY18 0.78
FY17 0.72
FY16 0.74
FY15 0.21
FY14 0.23
FY13 0.21
Government expenditure on
health and education (% GDP)
* For FY15,14 and 13 the Health and Education
expenditure was reported under single
category named social service
Industry sector: Pockets of traction, though still in doldrums
Source: CEIC, PPAC, ICICI Bank Research
Industrial production shows traction however sustainability in
question as other indicators show slowdown
Entrenched industrial slowdown visible in non-oil non-gold imports…
…as well as steel production…and electricity demand
8
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0Ju
l-15
Oct-15
Jan
-1
6
Ap
r-16
Ju
l-16
Oct-16
Jan
-1
7
Ap
r-17
Ju
l-17
Oct-17
Jan
-1
8
Ap
r-18
Ju
l-18
Oct-18
Jan
-1
9
Ap
r-19
Ju
l-19
( 3mma, % YoY)
IIP overall
-15.0
-5.0
5.0
15.0
25.0
35.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
( 3mma, % YoY)
Non-oil non-gold imports
-5.0
0.0
5.0
10.0
15.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
( 3mma, % YoY)
Electricity demand
-5.0
0.0
5.0
10.0
15.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
( 3mma, % YoY)
Crude steel production
Services sector: Intensified weakening in demand and consumer confidence
Source: CEIC, ICICI Bank Research
Passenger vehicle sales continue to decline RBI consumer confidence index also showing decline
SCBs non-food credit has been moderating since FebruaryCurrency in circulation moderating amidst weakening demand
9
-30.0
-20.0
-10.0
0.0
10.0
20.0
30.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % YoY) Passenger vehicle sales
PV sales de-growing since a year
9000.0
11000.0
13000.0
15000.0
17000.0
19000.0
21000.0
23000.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
( INR bn) Currency in circulation
4.0
6.0
8.0
10.0
12.0
14.0
16.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % YoY) SCBs non-food credit
90.0
95.0
100.0
105.0
110.0
Ju
n-1
5
Sep
-15
Dec-1
5
Mar-16
Ju
n-1
6
Sep
-16
Dec-1
6
Mar-17
Ju
n-1
7
Sep
-17
Dec-1
7
Mar-18
Ju
n-1
8
Sep
-18
Dec-1
8
Mar-19
Ju
n-1
9
RBI consumer confidence index
Agriculture sector: Robust monsoons to improve agricultural terms of trade
Source: CEIC, Ministry of Agriculture, IMD, ICICI Bank Research
Tractor sales have declined steeply this year… …priority sector lending has also declined
Cumulative southwest monsoons from 1st to 29h
September, 2019 has
been 9% surplus from their Long Period Average(LPA)
India's Kharif sowing was similar compared to the same time last year
10
-30.0
-20.0
-10.0
0.0
10.0
20.0
30.0
40.0
50.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % YoY) Tractor sales
Tractor sales growth in Q1 FY20
slowest in 4 years
(Lakh hectare) 28-Sep-18 27-Sep-19 % YoY
Rice 386.9 382.3 -1.2
Pulses 136.4 134.0 -1.7
Coarse Cereals 176.9 179.9 1.7
Oilseeds 179.3 179.5 0.1
Sugarcane 55.5 52.5 -5.5
Jute & Mesta 7.2 6.8 -5.0
Cotton 121.1 127.7 5.5
Total 1063.2 1062.7 0.0
Area sown under Kharif crops
Region
Actual rainfall
(in mm)
Normal rainfall
(in mm)
% departure from
LPA
All India 956 877 9%
East & NE 1216 1404 -13%
Northwest 580 599 -3%
Central 1248 973 28%
South Peninsula 833 720 16%
3.0
5.0
7.0
9.0
11.0
13.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % YoY) Priority sector lending
Global growth remains weak and inflation remains muted
Source: CEIC, Bloomberg, ICICI Bank Research
Global growth slowdown pulling down commodity prices Trade wars continue to impact global exports
Global inflation continues to pose downside surprisesGlobal services seems to be moderating as well
11
-40.0
-30.0
-20.0
-10.0
0.0
10.0
20.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % YoY) CRB commodity index
CRB commodity index growth has
been negative throughout 2019
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
Ju
l-1
5
Oct-1
5
Ja
n-16
Ap
r-1
6
Ju
l-1
6
Oct-1
6
Ja
n-17
Ap
r-1
7
Ju
l-1
7
Oct-1
7
Ja
n-18
Ap
r-1
8
Ju
l-1
8
Oct-1
8
Ja
n-19
Ap
r-1
9
Ju
l-1
9
(3 mma, % YoY) CPB World Trade Volume Index
49
50
51
52
53
54
55
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
Global
PMI manufacturing PMI services
-30
-20
-10
0
10
20
30
40
Ap
r-18
May-18
Ju
n-1
8
Ju
l-18
Aug
-18
Sep
-18
Oct-
18
No
v-1
8
Dec-1
8
Jan
-19
Fe
b-1
9
Mar-19
Ap
r-19
May-19
Ju
n-1
9
Ju
l-19
Aug
-19
Inflation surprise indices
US Euro-zone EMs
Domestic assets seeing volatility amidst fiscal concerns and trade wars
Source: CEIC, Bloomberg, ICICI Bank Research
Fiscal breach, disappointing liquidity report impact bond markets… ..reflecting in term spreads..
..and OIS rates Trade wars and geo-political concerns impacting currency markets
12
105.0
110.0
115.0
120.0
125.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
REER
6.0
6.5
7.0
7.5
8.0
8.5
Sep
-15
Dec-1
5
Mar-16
Ju
n-1
6
Sep
-16
Dec-1
6
Mar-17
Ju
n-1
7
Sep
-17
Dec-1
7
Mar-18
Ju
n-1
8
Sep
-18
Dec-1
8
Mar-19
Ju
n-1
9
Sep
-19
10-year Gsec(%)
4.5
5.0
5.5
6.0
6.5
7.0
7.5
8.0
Jan
-1
8
Mar-18
May-18
Ju
l-18
Sep
-18
No
v-1
8
Jan
-1
9
Mar-19
May-19
Ju
l-19
Sep
-19
(%) INR OIS 5-year rate
0.0
0.2
0.4
0.6
0.8
1.0
Jan
-1
8
Mar-18
May-18
Ju
l-18
Sep
-18
No
v-1
8
Jan
-1
9
Mar-19
May-19
Ju
l-19
Sep
-19
10-year Gsec - 2-year Gsec (%)
Source: CEIC, Bloomberg, ICICI Bank Research
While fiscal deficit so far this year has been lower than last fiscal, high
chances of breach at the back of fiscal stimulus
Pace of direct taxes lower than last year, expected to fall further with
corporate tax cuts
Expenditure has picked up pace recently, could be scaled back towards the
end of the year
Indirect tax collections need to be monitored amongst slowdown
13
Fiscal breach a concern as FM provides bold corporate tax cuts
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
100.0A
ug
-08
Aug
-09
Aug
-10
Aug
-11
Aug
-12
Aug
-13
Aug
-14
Aug
-15
Aug
-16
Aug
-17
Aug
-18
Aug
-19
(%)Fiscal deficit % of full years target
0.0
5.0
10.0
15.0
20.0
25.0
30.0
Aug
-08
Aug
-09
Aug
-10
Aug
-11
Aug
-12
Aug
-13
Aug
-14
Aug
-15
Aug
-16
Aug
-17
Aug
-18
Aug
-19
(%)Direct Tax % of full years target
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
Aug
-08
Aug
-09
Aug
-10
Aug
-11
Aug
-12
Aug
-13
Aug
-14
Aug
-15
Aug
-16
Aug
-17
Aug
-18
Aug
-19
(%)Indirect Tax % of full years target
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
50.0
Aug
-08
Aug
-09
Aug
-10
Aug
-11
Aug
-12
Aug
-13
Aug
-14
Aug
-15
Aug
-16
Aug
-17
Aug
-18
Aug
-19
(%)Total Expenditure % of full years target
FY2020 growth to remain muted although H2 could see some uptick
Source: CEIC, Bloomberg, RBI, Reuters, ICICI Bank Research
• GDP expectations for FY2020: We have revised GDP forecast lower to 6-6.2% after the sharp fall in
Q1 GDP to 5%
• Improvement in FCI with better rates transmission and the recent tax cut could boost growth
prospects in H2
14
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
Sep
-06
Sep
-07
Sep
-08
Sep
-09
Sep
-10
Sep
-11
Sep
-12
Sep
-13
Sep
-14
Sep
-15
Sep
-16
Sep
-17
Sep
-18
Sep
-19
Aggregate FCI
Great financial crisis
Taper tantrums
Brent crude hit USD 86/bbl
Easing
Conditions
-3.0
-2.0
-1.0
0.0
1.0
2.0
3.0
Au
g-16
Oct-1
6
Dec-16
Feb
-17
Ap
r-17
Jun
-17
Au
g-17
Oct-1
7
Dec-17
Feb
-18
Ap
r-18
Jun
-18
Au
g-18
Oct-1
8
Dec-18
Feb
-19
Ap
r-19
Jun
-19
Au
g-19
(% YoY)
Slowdown in Q1FY20 expected to continue in Q2FY20
Diffusion Index - Monthly Output Gap
Diffusion index monthly output gap shows that economy growing
well below potential
Easing financial conditions bode well for growth in the H2FY2020
Appendix
Industrial Sector
Some industrial production components showing signs of recovery..
Source: CEIC, ICICI Bank Research; s.a.- seasonally adjusted, non s.a- non seasonally adjusted 17
-4.0
0.0
4.0
8.0
12.0
16.0
Ju
l-15
Oct-15
Jan
-1
6
Ap
r-16
Ju
l-16
Oct-16
Jan
-1
7
Ap
r-17
Ju
l-17
Oct-17
Jan
-1
8
Ap
r-18
Ju
l-18
Oct-18
Jan
-1
9
Ap
r-19
Ju
l-19
( 3mma, % YoY)
IIP intermediate goods
-3.0
0.0
3.0
6.0
9.0
12.0
15.0
18.0
Ju
l-15
Oct-
15
Jan
-1
6
Ap
r-16
Ju
l-16
Oct-
16
Jan
-1
7
Ap
r-17
Ju
l-17
Oct-
17
Jan
-1
8
Ap
r-18
Ju
l-18
Oct-
18
Jan
-1
9
Ap
r-19
Ju
l-19
( 3mma, % YoY)
IIP non-durables goods
0.0
2.0
4.0
6.0
8.0
10.0
Ju
l-15
Oct-15
Jan
-1
6
Ap
r-16
Ju
l-16
Oct-16
Jan
-1
7
Ap
r-17
Ju
l-17
Oct-17
Jan
-1
8
Ap
r-18
Ju
l-18
Oct-18
Jan
-1
9
Ap
r-19
Ju
l-19
( 3mma, % YoY)
IIP manufacturing
-4.0
-3.0
-2.0
-1.0
0.0
1.0
2.0
3.0
4.0
Ju
l-15
Oct-15
Jan
-1
6
Ap
r-16
Ju
l-16
Oct-16
Jan
-1
7
Ap
r-17
Ju
l-17
Oct-17
Jan
-1
8
Ap
r-18
Ju
l-18
Oct-18
Jan
-1
9
Ap
r-19
Ju
l-19
(3 mma, % MoM)
IIP manufacturing
s.a non s.a
..while others continue to weaken…
Source: CEIC, ICICI Bank Research18
-8.0
-4.0
0.0
4.0
8.0
12.0
Ju
l-15
Oct-15
Jan
-1
6
Ap
r-16
Ju
l-16
Oct-16
Jan
-1
7
Ap
r-17
Ju
l-17
Oct-17
Jan
-1
8
Ap
r-18
Ju
l-18
Oct-18
Jan
-1
9
Ap
r-19
Ju
l-19
( 3mma, % YoY)
IIP durables goods
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
12.0
Ju
l-15
Oct-15
Jan
-1
6
Ap
r-16
Ju
l-16
Oct-16
Jan
-1
7
Ap
r-17
Ju
l-17
Oct-17
Jan
-1
8
Ap
r-18
Ju
l-18
Oct-18
Jan
-1
9
Ap
r-19
Ju
l-19
( 3mma, % YoY)
IIP construction
0.0
2.0
4.0
6.0
8.0
10.0
12.0
Ju
l-15
Oct-15
Jan
-1
6
Ap
r-16
Ju
l-16
Oct-16
Jan
-1
7
Ap
r-17
Ju
l-17
Oct-17
Jan
-1
8
Ap
r-18
Ju
l-18
Oct-18
Jan
-1
9
Ap
r-19
Ju
l-19
( 3mma, % YoY)
IIP basic goods
-8.0
-4.0
0.0
4.0
8.0
12.0
16.0
Ju
l-15
Oct-15
Jan
-1
6
Ap
r-16
Ju
l-16
Oct-16
Jan
-1
7
Ap
r-17
Ju
l-17
Oct-17
Jan
-1
8
Ap
r-18
Ju
l-18
Oct-18
Jan
-1
9
Ap
r-19
Ju
l-19
( 3mma, % YoY)
IIP capital goods
…even while mining and electricity provide some relief
Source: CEIC, ICICI Bank Research; s.a.- seasonally adjusted, non s.a- non seasonally adjusted19
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
Ju
l-15
Oct-15
Jan
-1
6
Ap
r-16
Ju
l-16
Oct-16
Jan
-1
7
Ap
r-17
Ju
l-17
Oct-17
Jan
-1
8
Ap
r-18
Ju
l-18
Oct-18
Jan
-1
9
Ap
r-19
Ju
l-19
( 3mma, % YoY)
IIP mining
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
Ju
l-15
Oct-15
Jan
-1
6
Ap
r-16
Ju
l-16
Oct-16
Jan
-1
7
Ap
r-17
Ju
l-17
Oct-17
Jan
-1
8
Ap
r-18
Ju
l-18
Oct-18
Jan
-1
9
Ap
r-19
Ju
l-19
( 3mma, % YoY)
IIP electricity
-10.0
-6.0
-2.0
2.0
6.0
10.0
Ju
l-15
Oct-15
Jan
-1
6
Ap
r-16
Ju
l-16
Oct-16
Jan
-1
7
Ap
r-17
Ju
l-17
Oct-17
Jan
-1
8
Ap
r-18
Ju
l-18
Oct-18
Jan
-1
9
Ap
r-19
Ju
l-19
(3 mma, % MoM)
IIP mining
s.a non s.a
-5.0
0.0
5.0
10.0
Ju
l-15
Oct-15
Jan
-1
6
Ap
r-16
Ju
l-16
Oct-16
Jan
-1
7
Ap
r-17
Ju
l-17
Oct-17
Jan
-1
8
Ap
r-18
Ju
l-18
Oct-18
Jan
-1
9
Ap
r-19
Ju
l-19
(3 mma, % MoM)
IIP electricity
s.a non s.a
Trade deficit narrowed with headwinds from weakening global trade..
Source: CEIC, ICICI Bank Research ; s.a.- seasonally adjusted, non s.a- non seasonally adjusted 20
-100.0
-50.0
0.0
50.0
100.0
150.0
200.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
( USD mn) Trade Balance
-25.0
-20.0
-15.0
-10.0
-5.0
0.0
5.0
10.0
15.0
20.0
25.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
( 3mma, % YoY)Exports
-10.0
-5.0
0.0
5.0
10.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % MoM)
Exports
s.a non s.a
-25.0
-15.0
-5.0
5.0
15.0
25.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
( 3mma, % YoY)
Core industry imports
..as well as domestic demand
Source: CEIC, ICICI Bank Research ; s.a.- seasonally adjusted, non s.a- non seasonally adjusted 21
-15.0
-5.0
5.0
15.0
25.0
35.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
( 3mma, % YoY)
Non-oil non-gold imports
-10.0
-6.0
-2.0
2.0
6.0
10.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % MoM)
Non-oil non-gold imports
s.a non s.a
-20.0
-10.0
0.0
10.0
20.0
30.0
40.0
50.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
( 3mma, % YoY)
Non-oil imports
-10.0
-6.0
-2.0
2.0
6.0
10.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % MoM)
Non-oil imports
s.a non s.a
Cargo and rail freight seeing continued weakness..
Source: CEIC, ICICI Bank Research; s.a.- seasonally adjusted, non s.a- non seasonally adjusted 22
-5.0
-3.0
-1.0
1.0
3.0
5.0
7.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
( 3mma, % YoY)
Freight originating
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % MoM)
Freight originating
s.a non s.a
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % MoM)
Cargo traffic
s.a non s.a
-10.0
-5.0
0.0
5.0
10.0
15.0
20.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
( 3mma, % YoY)
Cargo traffic
..spread across commodities
Source: CEIC, ICICI Bank Research23
-15.0
-10.0
-5.0
0.0
5.0
10.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
( 3mma, % YoY)
Rail traffic freight
-15.0
-10.0
-5.0
0.0
5.0
10.0
15.0
20.0
25.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
( 3mma, % YoY)
Cement freight
-15.0
-10.0
-5.0
0.0
5.0
10.0
15.0
20.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
( 3mma, % YoY)
Coal freight
-10.0
0.0
10.0
20.0
30.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
( 3mma, % YoY)
Pig iron freight
Commercial vehicle production continued to decline; while trend in crude steel
production also reversed
Source: CEIC, ICICI Bank Research; s.a.- seasonally adjusted, non s.a- non seasonally adjusted 24
-35.0
-20.0
-5.0
10.0
25.0
40.0
55.0
70.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
( 3mma, % YoY)
Commercial vehicle production
-15.0
-10.0
-5.0
0.0
5.0
10.0
15.0
20.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % MoM)
Commercial vehicle production
s.a non s.a
-3.0
-2.0
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % MoM)
Crude steel production
s.a non s.a
-5.0
0.0
5.0
10.0
15.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
( 3mma, % YoY)
Crude steel production
Electricity demand and generation remain tepid..
Source: CEIC, ICICI Bank Research; s.a.- seasonally adjusted, non s.a- non seasonally adjusted25
0.0
3.0
6.0
9.0
12.0
15.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
( 3mma, % YoY)
Electricity demand
-2.0
1.0
4.0
7.0
10.0
13.0
Ju
l-15
Oct-15
Jan
-1
6
Ap
r-16
Ju
l-16
Oct-16
Jan
-1
7
Ap
r-17
Ju
l-17
Oct-17
Jan
-1
8
Ap
r-18
Ju
l-18
Oct-18
Jan
-1
9
Ap
r-19
Ju
l-19
( 3mma, % YoY)
Electricity generation
-5.0
0.0
5.0
10.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % MoM)
Electricity demand
s.a non s.a
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
Ju
l-15
Oct-15
Jan
-1
6
Ap
r-16
Ju
l-16
Oct-16
Jan
-1
7
Ap
r-17
Ju
l-17
Oct-17
Jan
-1
8
Ap
r-18
Ju
l-18
Oct-18
Jan
-1
9
Ap
r-19
Ju
l-19
(3 mma, % MoM)
Electricity generation
s.a non s.a
…so do petroleum production and consumption
Source: PPAC, ICICI Bank Research; s.a.- seasonally adjusted, non s.a- non seasonally adjusted26
-5.0
0.0
5.0
10.0
15.0
20.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
( 3mma, % YoY)
Petroleum Production
-5.0
0.0
5.0
10.0
15.0
20.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
( 3mma, % YoY)
Petroleum Consumption
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % MoM)
Petroleum production
s.a non s.a
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % MoM)
Petroleum consumption
s.a non s.a
..while coal production and offtake declined
Source: Coal India, ICICI Bank Research; s.a.- seasonally adjusted, non s.a- non seasonally adjusted27
-10.0
-5.0
0.0
5.0
10.0
15.0
20.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
( 3mma, % YoY)
Coal Production
-10.0
-5.0
0.0
5.0
10.0
15.0
20.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
( 3mma, % YoY)
Coal Offtake
-20.0
-15.0
-10.0
-5.0
0.0
5.0
10.0
15.0
20.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % MoM)
Coal production
s.a non s.a
-10.0
-5.0
0.0
5.0
10.0
15.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % MoM)
Coal offtake
s.a non s.a
PMI manufacturing has seen below trend expansion; decline in cement
production a cause of worry
Source: Bloomberg, CEIC, ICICI Bank Research28
46.0
48.0
50.0
52.0
54.0
56.0
Aug
-16
Oct-16
Dec-1
6
Fe
b-1
7
Ap
r-17
Ju
n-1
7
Aug
-17
Oct-17
Dec-1
7
Fe
b-1
8
Ap
r-18
Ju
n-1
8
Aug
-18
Oct-18
Dec-1
8
Fe
b-1
9
Ap
r-19
Ju
n-1
9
Aug
-19
PMI manufacturing
-15.0
-10.0
-5.0
0.0
5.0
10.0
15.0
20.0
25.0
Ju
l-15
Oct-15
Jan
-1
6
Ap
r-16
Ju
l-16
Oct-16
Jan
-1
7
Ap
r-17
Ju
l-17
Oct-17
Jan
-1
8
Ap
r-18
Ju
l-18
Oct-18
Jan
-1
9
Ap
r-19
Ju
l-19
(3 mma, % YoY) Cement production
Services Sector
Inventory correction, changing regulation and demand postponement adding
to slowdown in the auto sector..
Source: CEIC, ICICI Bank Research; s.a.- seasonally adjusted, non s.a- non seasonally adjusted30
-30.0
-20.0
-10.0
0.0
10.0
20.0
30.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % YoY) Passenger vehicle sales
-40.0
-20.0
0.0
20.0
40.0
60.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % YoY) Commercial vehicle sales
-15.0
-10.0
-5.0
0.0
5.0
10.0
15.0
20.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % MoM)
Passenger vehicle sales
s.a non s.a
-15.0
-10.0
-5.0
0.0
5.0
10.0
15.0
20.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % MoM)
Commercial vehicle sales
s.a non s.a
..across segments and rural and urban areas
Source: CEIC, ICICI Bank Research; s.a.- seasonally adjusted, non s.a- non seasonally adjusted31
-25.0
-15.0
-5.0
5.0
15.0
25.0
35.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % YoY) Two wheeler sales
-50.0
-25.0
0.0
25.0
50.0
75.0
100.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % YoY) Three wheeler sales
-30.0
-20.0
-10.0
0.0
10.0
20.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % MoM)
Two wheeler sales
s.a non s.a
-20.0
-10.0
0.0
10.0
20.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % MoM)
Three wheeler sales
s.a non s.a
Air passenger traffic picked up while rail passenger traffic moved down
Source: CEIC, ICICI Bank Research; s.a.- seasonally adjusted, non s.a- non seasonally adjusted32
-6.0
-4.0
-2.0
0.0
2.0
4.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % YoY) Passenger traffic originating
-4.0
-2.0
0.0
2.0
4.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % MoM)
Passenger traffic originating
s.a non s.a
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % MoM)
Airport passenger traffic
s.a non s.a
-5.0
0.0
5.0
10.0
15.0
20.0
25.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % YoY) Airport passenger traffic
Foreign tourism and telecom subscribers remained stagnant; while growth in
insurance premiums declined
Source: CEIC, ICICI Bank Research33
-3.0
0.0
3.0
6.0
9.0
12.0
15.0A
ug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % YoY) Cargo traffic monthly
-2.0
3.0
8.0
13.0
18.0
23.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % YoY) Foreign tourist arrivals
950.0
1000.0
1050.0
1100.0
1150.0
1200.0
1250.0
Ju
l-15
Oct-15
Jan
-1
6
Ap
r-16
Ju
l-16
Oct-16
Jan
-1
7
Ap
r-17
Ju
l-17
Oct-17
Jan
-1
8
Ap
r-18
Ju
l-18
Oct-18
Jan
-1
9
Ap
r-19
Ju
l-19
(mn) Telecom subscribers
-20.0
-10.0
0.0
10.0
20.0
30.0
40.0
50.0
60.0
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % YoY) Life insurance premium
Indicators of rural economy continue to be sluggish; could recover with robust
monsoons…
Source: CEIC, ICICI Bank Research; s.a.- seasonally adjusted, non s.a- non seasonally adjusted34
-30.0
-20.0
-10.0
0.0
10.0
20.0
30.0
40.0
50.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % YoY) Tractor sales
-30.0
-20.0
-10.0
0.0
10.0
20.0
30.0
40.0
50.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % MoM)
Tractor sales
s.a non s.a
-4.0
-2.0
0.0
2.0
4.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % MoM)
Micro and small industry credit lending
s.a non s.a
-10.0
-8.0
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % YoY) Micro and small industry credit lending
..including credit to agriculture and priority sector
Source: CEIC, ICICI Bank Research; s.a.- seasonally adjusted, non s.a- non seasonally adjusted35
-2.0
-1.0
0.0
1.0
2.0
3.0
4.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % MoM)
Agricultural credit
s.a non s.a
-2.0
-1.0
0.0
1.0
2.0
3.0
4.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % MoM)
Priority sector lending
s.a non s.a
0.0
5.0
10.0
15.0
20.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % YoY) Agriculture credit
3.0
5.0
7.0
9.0
11.0
13.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % YoY) Priority sector lending
Credit to large and medium industry is moderating
Source: CEIC, ICICI Bank Research; s.a.- seasonally adjusted, non s.a- non seasonally adjusted36
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % MoM)
Large industry credit lending
s.a non s.a
-4.0
-2.0
0.0
2.0
4.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % MoM)
Medium industry credit lending
s.a non s.a
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % YoY) Large industry credit lending
-15.0
-10.0
-5.0
0.0
5.0
10.0
15.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % YoY) Medium industry credit lending
Growth in personal loans has stagnated (in consonance with slowing
consumption); while credit-deposit ratios are also coming-off
Source: CEIC, ICICI Bank Research 37
69.0
71.0
73.0
75.0
77.0
79.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
Credit-deposit ratio
12.0
13.0
14.0
15.0
16.0
17.0
18.0
19.0
20.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % YoY) Personal loans
Net inflows to MFs are close to average; equity purchases by MFs are seeing further
improvement; while SIP contribution is stagnant and PMI services moderated in August
Source: CEIC, AMFI, Bloomberg, ICICI Bank Research38
-150.0
-100.0
-50.0
0.0
50.0
100.0
150.0
200.0
250.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
( INR bn)MF net equity purchases
-3000.0
-2000.0
-1000.0
0.0
1000.0
2000.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
( INR bn) MF net inflow
46.0
48.0
50.0
52.0
54.0
56.0
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
PMI Services
0.0
20.0
40.0
60.0
80.0
100.0
Aug
-16
Oct-16
Dec-1
6
Fe
b-1
7
Ap
r-17
Ju
n-1
7
Aug
-17
Oct-17
Dec-1
7
Fe
b-1
8
Ap
r-18
Ju
n-1
8
Aug
-18
Oct-18
Dec-1
8
Fe
b-1
9
Ap
r-19
Ju
n-1
9
Aug
-19
(INR bn) SIP contribution
Financial Sector
Fixed income markets are seeing volatility amongst fiscal concerns; H2
borrowing calendar could lead to further curve steepening
Source: Bloomberg, ICICI Bank Research40
6.0
6.5
7.0
7.5
8.0
8.5S
ep
-15
Dec-1
5
Mar-16
Ju
n-1
6
Sep
-16
Dec-1
6
Mar-17
Ju
n-1
7
Sep
-17
Dec-1
7
Mar-18
Ju
n-1
8
Sep
-18
Dec-1
8
Mar-19
Ju
n-1
9
Sep
-19
10-year Gsec(%)
5.0
5.5
6.0
6.5
7.0
7.5
Sep
-15
Dec-1
5
Mar-16
Ju
n-1
6
Sep
-16
Dec-1
6
Mar-17
Ju
n-1
7
Sep
-17
Dec-1
7
Mar-18
Ju
n-1
8
Sep
-18
Dec-1
8
Mar-19
Ju
n-1
9
Sep
-19
Weighted average call rate(%)
0.0
0.5
1.0
1.5
2.0
Sep
-15
Dec-1
5
Mar-16
Ju
n-1
6
Sep
-16
Dec-1
6
Mar-17
Ju
n-1
7
Sep
-17
Dec-1
7
Mar-18
Ju
n-1
8
Sep
-18
Dec-1
8
Mar-19
Ju
n-1
9
Sep
-19
10-year Gsec - 3-month T-bill(%)
5.0
5.5
6.0
6.5
7.0
7.5
8.0
8.5
Sep
-15
Dec-1
5
Mar-16
Ju
n-1
6
Sep
-16
Dec-1
6
Mar-17
Ju
n-1
7
Sep
-17
Dec-1
7
Mar-18
Ju
n-1
8
Sep
-18
Dec-1
8
Mar-19
Ju
n-1
9
Sep
-19
3-month T-bill(%)
Currency in circulation moderated while reserve money declined sharply
Source: CEIC, ICICI Bank Research
Note: Reserve money(M0)=currency in circulation + deposits with RBI; M1= M0 + demand deposits with the banking system
M4= M1 + time deposits with the banking system + post office deposits
41
9000.0
11000.0
13000.0
15000.0
17000.0
19000.0
21000.0
23000.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
( INR bn) Currency in circulation
10000.0
15000.0
20000.0
25000.0
30000.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
( INR bn) Reserve money
16000.0
20000.0
24000.0
28000.0
32000.0
36000.0
40000.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(INR bn) M1
100000.0
110000.0
120000.0
130000.0
140000.0
150000.0
160000.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(INR bn) M4
Both deposit growth and credit growth are falling..
Source: CEIC, ICICI Bank Research; s.a.- seasonally adjusted, non s.a- non seasonally adjusted42
-1.0
0.0
1.0
2.0
3.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % MoM)
SCBs deposits
s.a non s.a
-0.5
0.0
0.5
1.0
1.5
2.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % MoM)
SCBs bank credit
s.a non s.a
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % YoY) SCBs deposits
0.0
5.0
10.0
15.0
20.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % YoY) SCBs bank credit
..showing in continuous moderation of non-food credit growth
Source: CEIC, ICICI Bank Research43
-60.0
-45.0
-30.0
-15.0
0.0
15.0
30.0
45.0A
ug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % YoY) SCBs food credit
4.0
6.0
8.0
10.0
12.0
14.0
16.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % YoY) SCBs non-food credit
Global growth weakening global commodity prices, while Rupee seeing
depreciation amidst rising trade war and geo-political concerns
Source: Bloomberg, CEIC, ICICI Bank Research; s.a.- seasonally adjusted, non s.a- non seasonally adjusted44
-40.0
-30.0
-20.0
-10.0
0.0
10.0
20.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % YoY) CRB commodity index
105.0
110.0
115.0
120.0
125.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
REER
68.0
70.0
72.0
74.0
76.0
78.0
80.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
NEER
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % MoM)
CRB commodity index
s.a non s.a
Debt capital flows moderated while equity flows improved
Source: Bloomberg, ICICI Bank Research45
-4000.0
-2000.0
0.0
2000.0
4000.0
6000.0
Sep
-15
Dec-1
5
Mar-16
Ju
n-1
6
Sep
-16
Dec-1
6
Mar-17
Ju
n-1
7
Sep
-17
Dec-1
7
Mar-18
Ju
n-1
8
Sep
-18
Dec-1
8
Mar-19
Ju
n-1
9
Sep
-19
(USD mn) FPI debt f low
-6000.0
-4000.0
-2000.0
0.0
2000.0
4000.0
6000.0
8000.0
Sep
-15
Dec-1
5
Mar-16
Ju
n-1
6
Sep
-16
Dec-1
6
Mar-17
Ju
n-1
7
Sep
-17
Dec-1
7
Mar-18
Ju
n-1
8
Sep
-18
Dec-1
8
Mar-19
Ju
n-1
9
Sep
-19
(USD mn) FPI equity flow
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
Sep
-18
Oct-
18
No
v-1
8
Dec-1
8
Jan
-19
Fe
b-1
9
Mar-19
Ap
r-19
May-19
Ju
n-1
9
Ju
l-19
Aug
-19
Sep
-19
Net Portfolio flows
Debt Equity(USD bn)
FYTD Debt flows USD 2.7 bn
FYTD Equity flows USD -0.1 bn
Key inflation
metrics
Wholesale price index (WPI) moderated as did WPI core
Source: CEIC, ICICI Bank Research; s.a.- seasonally adjusted, non s.a- non seasonally adjusted47
-7.0
-5.0
-3.0
-1.0
1.0
3.0
5.0
7.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % YoY) WPI
-5.0
-3.0
-1.0
1.0
3.0
5.0
7.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % YoY) WPI core
-2.0
-1.0
0.0
1.0
2.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % MoM)
WPI
s.a non s.a
-1.0
-0.5
0.0
0.5
1.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % MoM)
WPI core
s.a non s.a
WPI food picked up, while CPI headline also moved up
Source: CEIC, ICICI Bank Research; s.a.- seasonally adjusted, non s.a- non seasonally adjusted48
-3.0
-1.0
1.0
3.0
5.0
7.0
9.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % YoY) WPI food
1.0
2.0
3.0
4.0
5.0
6.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % YoY) CPI
-4.0
-2.0
0.0
2.0
4.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % MoM)
WPI food
s.a non s.a
-0.5
0.0
0.5
1.0
1.5
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % MoM)
CPI
s.a non s.a
CPI core inflation was stagnant while food inflation increased
Source: CEIC, ICICI Bank Research; s.a.- seasonally adjusted, non s.a- non seasonally adjusted49
0.0
0.2
0.4
0.6
0.8
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % MoM)
CPI core
sa nsa
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % MoM)
CPI food
s.a non s.a
3.5
4.0
4.5
5.0
5.5
6.0
6.5
Au
g-15
No
v-15
Feb
-1
6
May
-16
Au
g-16
No
v-16
Feb
-1
7
May
-17
Au
g-17
No
v-17
Feb
-1
8
May
-18
Au
g-18
No
v-18
Feb
-1
9
May
-19
Au
g-19
(3 mma, % YoY) CPI core
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
Au
g-15
No
v-15
Feb
-1
6
May
-16
Au
g-16
No
v-16
Feb
-1
7
May
-17
Au
g-17
No
v-17
Feb
-1
8
May
-18
Au
g-18
No
v-18
Feb
-1
9
May
-19
Au
g-19
(3 mma, % YoY) CPI food
Rice prices are picking up..
Source: CEIC, ICICI Bank Research; s.a.- seasonally adjusted, non s.a- non seasonally adjusted50
-5.0
-3.0
-1.0
1.0
3.0
5.0
7.0
9.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % YoY)Rice retail prices
-5.0
-3.0
-1.0
1.0
3.0
5.0
7.0
9.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % YoY)Rice wholesale prices
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % MoM)
Rice retail prices
s.a non s.a
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % MoM)
Rice wholesale prices
s.a non s.a
..along with wheat prices
Source: CEIC, ICICI Bank Research; s.a.- seasonally adjusted, non s.a- non seasonally adjusted51
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
12.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % YoY)Wheat retail prices
-6.0
-3.0
0.0
3.0
6.0
9.0
12.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % YoY)Wheat wholesale prices
-2.0
-1.0
0.0
1.0
2.0
3.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % MoM)
Wheat retail prices
s.a non s.a
-2.0
-1.0
0.0
1.0
2.0
3.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % MoM)
Wheat wholesale prices
s.a non s.a
..while crude prices cooled-off further
Source: Bloomberg, ICICI Bank Research; s.a.- seasonally adjusted, non s.a- non seasonally adjusted52
-60.0
-40.0
-20.0
0.0
20.0
40.0
60.0
80.0
Sep
-15
Dec-1
5
Mar-16
Ju
n-1
6
Sep
-16
Dec-1
6
Mar-17
Ju
n-1
7
Sep
-17
Dec-1
7
Mar-18
Ju
n-1
8
Sep
-18
Dec-1
8
Mar-19
Ju
n-1
9
Sep
-19
(3 mma, % YoY) India crude oil basket
-20.0
-10.0
0.0
10.0
20.0
Sep
-15
Dec-1
5
Mar-16
Ju
n-1
6
Sep
-16
Dec-1
6
Mar-17
Ju
n-1
7
Sep
-17
Dec-1
7
Mar-18
Ju
n-1
8
Sep
-18
Dec-1
8
Mar-19
Ju
n-1
9
Sep
-19
(3 mma, % MoM)
India crude oil basket
s.a non s.a
Fiscal Sector
Growth in fiscal deficit has been tepid as revenue receipts saw sharp uptick on
account of RBI transfer
Source: CEIC, Union Budget, ICICI Bank Research54
-150.0
-100.0
-50.0
0.0
50.0
100.0
150.0
200.0
250.0
300.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % YoY)Fiscal deficit
-20.0
0.0
20.0
40.0
60.0
80.0
100.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % YoY)Revenue receipts
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
100.0
Aug
-08
Aug
-09
Aug
-10
Aug
-11
Aug
-12
Aug
-13
Aug
-14
Aug
-15
Aug
-16
Aug
-17
Aug
-18
Aug
-19
(%)Fiscal deficit % of full years target
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
Aug
-08
Aug
-09
Aug
-10
Aug
-11
Aug
-12
Aug
-13
Aug
-14
Aug
-15
Aug
-16
Aug
-17
Aug
-18
Aug
-19
(%)Revenue receipts % of full years target
Pace of tax collections lower than last fiscal
Source: CEIC, Union Budget, ICICI Bank Research55
-10.0
0.0
10.0
20.0
30.0
40.0
50.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % YoY)Direct tax
-20.0
-10.0
0.0
10.0
20.0
30.0
40.0
50.0
60.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % YoY)Indirect tax
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
Aug
-08
Aug
-09
Aug
-10
Aug
-11
Aug
-12
Aug
-13
Aug
-14
Aug
-15
Aug
-16
Aug
-17
Aug
-18
Aug
-19
(%)Indirect Tax % of full years target
0.0
5.0
10.0
15.0
20.0
25.0
30.0
Aug
-08
Aug
-09
Aug
-10
Aug
-11
Aug
-12
Aug
-13
Aug
-14
Aug
-15
Aug
-16
Aug
-17
Aug
-18
Aug
-19
(%)Direct Tax % of full years target
Growth in expenditure has risen sharply; while pace of expenditure remains lower
than last fiscal
Source: CEIC, Union Budget, ICICI Bank Research56
-150.0
-100.0
-50.0
0.0
50.0
100.0
150.0
200.0
250.0
300.0
Aug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % YoY)Capital expenditure
-10.0
0.0
10.0
20.0
30.0
40.0A
ug
-15
No
v-1
5
Fe
b-1
6
May-16
Aug
-16
No
v-1
6
Fe
b-1
7
May-17
Aug
-17
No
v-1
7
Fe
b-1
8
May-18
Aug
-18
No
v-1
8
Fe
b-1
9
May-19
Aug
-19
(3 mma, % YoY)Revenue expenditure
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
50.0
Aug
-08
Aug
-09
Aug
-10
Aug
-11
Aug
-12
Aug
-13
Aug
-14
Aug
-15
Aug
-16
Aug
-17
Aug
-18
Aug
-19
(%)Revenue expenditure % of full years target
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
Aug
-08
Aug
-09
Aug
-10
Aug
-11
Aug
-12
Aug
-13
Aug
-14
Aug
-15
Aug
-16
Aug
-17
Aug
-18
Aug
-19
(%)Capital expenditure % of full years target
External Sector
Both current and capital account improved compared to last year leading to BoP
surplus in Q1 FY2020..
Source: CEIC, RBI, ICICI Bank Research58
-3.0
-2.5
-2.0
-1.5
-1.0
-0.5
0.0
Ju
n-1
5
Sep
-15
Dec-1
5
Mar-16
Ju
n-1
6
Sep
-16
Dec-1
6
Mar-17
Ju
n-1
7
Sep
-17
Dec-1
7
Mar-18
Ju
n-1
8
Sep
-18
Dec-1
8
Mar-19
Ju
n-1
9
Current account balance (% of GDP)(%)
0.0
5000.0
10000.0
15000.0
20000.0
25000.0
30000.0
35000.0
Ju
n-1
5
Sep
-15
Dec-1
5
Mar-16
Ju
n-1
6
Sep
-16
Dec-1
6
Mar-17
Ju
n-1
7
Sep
-17
Dec-1
7
Mar-18
Ju
n-1
8
Sep
-18
Dec-1
8
Mar-19
Ju
n-1
9
Capital account balance(USD mn)
-15000.0
-10000.0
-5000.0
0.0
5000.0
10000.0
15000.0
Ju
n-1
5
Sep
-15
Dec-1
5
Mar-16
Ju
n-1
6
Sep
-16
Dec-1
6
Mar-17
Ju
n-1
7
Sep
-17
Dec-1
7
Mar-18
Ju
n-1
8
Sep
-18
Dec-1
8
Mar-19
Ju
n-1
9
Balance of payment- overall(USD mn)
-20000.0
-17500.0
-15000.0
-12500.0
-10000.0
-7500.0
-5000.0
-2500.0
0.0
Ju
n-1
5
Sep
-15
Dec-1
5
Mar-16
Ju
n-1
6
Sep
-16
Dec-1
6
Mar-17
Ju
n-1
7
Sep
-17
Dec-1
7
Mar-18
Ju
n-1
8
Sep
-18
Dec-1
8
Mar-19
Ju
n-1
9
Current account balance(USD mn)
..assisted by remittances and FDI flows
Source: CEIC, Bloomberg, RBI, ICICI Bank Research59
-1000.0
1000.0
3000.0
5000.0
7000.0
9000.0
Ju
n-1
5
Sep
-15
Dec-1
5
Mar-16
Ju
n-1
6
Sep
-16
Dec-1
6
Mar-17
Ju
n-1
7
Sep
-17
Dec-1
7
Mar-18
Ju
n-1
8
Sep
-18
Dec-1
8
Mar-19
Ju
n-1
9
(USD mn) Net foreign direct investment
-4000.0
-2000.0
0.0
2000.0
4000.0
6000.0
Sep
-15
Dec-1
5
Mar-16
Ju
n-1
6
Sep
-16
Dec-1
6
Mar-17
Ju
n-1
7
Sep
-17
Dec-1
7
Mar-18
Ju
n-1
8
Sep
-18
Dec-1
8
Mar-19
Ju
n-1
9
Sep
-19
(USD mn) FPI debt f low
-6000.0
-4000.0
-2000.0
0.0
2000.0
4000.0
6000.0
8000.0
Sep
-15
Dec-1
5
Mar-16
Ju
n-1
6
Sep
-16
Dec-1
6
Mar-17
Ju
n-1
7
Sep
-17
Dec-1
7
Mar-18
Ju
n-1
8
Sep
-18
Dec-1
8
Mar-19
Ju
n-1
9
Sep
-19
(USD mn) FPI equity flow
7000.0
8000.0
9000.0
10000.0
11000.0
12000.0
13000.0
14000.0
Ju
n-1
5
Sep
-15
Dec-1
5
Mar-16
Ju
n-1
6
Sep
-16
Dec-1
6
Mar-17
Ju
n-1
7
Sep
-17
Dec-1
7
Mar-18
Ju
n-1
8
Sep
-18
Dec-1
8
Mar-19
Ju
n-1
9
Remittances(USD mn)
Surveys
Industrial confidence is showing stagnation, while consumer confidence fell
sharply in consonance with weakening demand
Source: CEIC, RBI, ICICI Bank Research61
95.0
100.0
105.0
110.0
115.0
Ju
n-1
5
Sep
-15
Dec-1
5
Mar-16
Ju
n-1
6
Sep
-16
Dec-1
6
Mar-17
Ju
n-1
7
Sep
-17
Dec-1
7
Mar-18
Ju
n-1
8
Sep
-18
Dec-1
8
Mar-19
Ju
n-1
9
RBI industrial survey
100.0
102.0
104.0
106.0
108.0
110.0
112.0
Ju
n-1
5
Sep
-15
Dec-1
5
Mar-16
Ju
n-1
6
Sep
-16
Dec-1
6
Mar-17
Ju
n-1
7
Sep
-17
Dec-1
7
Mar-18
Ju
n-1
8
Sep
-18
Dec-1
8
Mar-19
Ju
n-1
9
(3 mma) RBI industrial survey
95.0
97.0
99.0
101.0
103.0
105.0
107.0
109.0
Ju
n-1
5
Sep
-15
Dec-1
5
Mar-16
Ju
n-1
6
Sep
-16
Dec-1
6
Mar-17
Ju
n-1
7
Sep
-17
Dec-1
7
Mar-18
Ju
n-1
8
Sep
-18
Dec-1
8
Mar-19
Ju
n-1
9
(3 mma) RBI consumer confidence index
90.0
95.0
100.0
105.0
110.0
Ju
n-1
5
Sep
-15
Dec-1
5
Mar-16
Ju
n-1
6
Sep
-16
Dec-1
6
Mar-17
Ju
n-1
7
Sep
-17
Dec-1
7
Mar-18
Ju
n-1
8
Sep
-18
Dec-1
8
Mar-19
Ju
n-1
9
RBI consumer confidence index
Household inflation expectations continue to moderate
Source: CEIC, RBI, ICICI Bank Research62
7.0
7.5
8.0
8.5
9.0
9.5
10.0
10.5
11.0
Ju
n-1
5
Sep
-15
Dec-1
5
Mar-16
Ju
n-1
6
Sep
-16
Dec-1
6
Mar-17
Ju
n-1
7
Sep
-17
Dec-1
7
Mar-18
Ju
n-1
8
Sep
-18
Dec-1
8
Mar-19
Ju
n-1
9
RBI inflation expection 3 months ahead(%)
7.0
8.0
9.0
10.0
11.0
12.0
Ju
n-1
5
Sep
-15
Dec-1
5
Mar-16
Ju
n-1
6
Sep
-16
Dec-1
6
Mar-17
Ju
n-1
7
Sep
-17
Dec-1
7
Mar-18
Ju
n-1
8
Sep
-18
Dec-1
8
Mar-19
Ju
n-1
9
RBI inflation expection 1 year ahead(%)
Thank you
64
Treasury Research Group
Economics Research
Kamalika Das Economist (+91-22) 4008-1414 (ext 6280) [email protected]
Shivom Chakravarti Economist (+91-22) 4008-1414 (ext 6273) [email protected]
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