India Economy Update — Jobs A Worry But Premiumisation Continues: Nirmal Bang

Nirmal Bang Report

Economic activity indicators moderated at the margin from the previous fortnight, except power production and UPI payments. However, most indicators remained above their average run-rate.

Urban unemployment shot up to 9.4% in the first fortnight of April 2023 from 8.4% in the previous fortnight even as rural unemployment declined modestly to 7.3%.

Incremental commentary from companies is also indicating some uptick in rural demand although unseasonal rains and potential adverse effect of El Nino remain a cause for concern.

Bank credit growth moderated to 15% YoY from 15.7% YoY in the previous fortnight. Domestic air traffic moderated from the previous fortnight, but remained above the average run-rate while rail passenger traffic slipped from the previous fortnight and was below the average run-rate.

Rail freight traffic, toll collections and use of credit cards at point of sales and on Ecommerce platforms moderated from the previous fortnight but remained above the average run-rate.

In financial markets, foreign portfolio investments bought Indian equities worth ~$0.9 billion with India VIX moderating substantially while domestic institutional investors sold Indian equities worth ~$0.3 billion in the first fortnight of April 2023.

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