Finance & Economy | News & Insights

Economic Pathway Update – May 2023

Published: May 25, 2023


US Economy:

  • US GDP grew 1.1% in Q1 2023 on account of robust consumer spending.
  • Senior Loan Officer Opinion Survey showed banks tightened lending conditions in Q1 2023.
  • Tighter lending conditions expected to curtail demand in the coming quarter.
  • US Treasury cash balances plunge to USD 57.3 billion in the absence of debt ceiling revision.
  • Hawkish European central banks narrowed the dollar’s rate advantage over EUR and GBP.
  • Weakening pressure on USD expected in the coming months.

Domestic Economy:

  • GST collections, e-way bills and PMIs continued to stay healthy in April.
  • IIP recorded a dismal performance with growth of 1.1% y-o-y in March.
  • Retail inflation moderated to an 18-month low of 4.7% in April.
  • Core price pressures eased to 5.5% in April after staying sticky near 6%.
  • Bank credit grew 15% in FY23 driven by the retail and services segment.
  • Merchandise exports contracted for the 3rd month in a row in April.
  • Services exports were upbeat recording healthy growth of 26% in April.
  • India’s forex reserves rose to USD 600 billion, highest since June 2022.
  • Rupee contained largely within 81-83 levels on two-way RBI FX intervention.
  • Withdrawal of Rs 2000 notes could see an infusion of Rs 1-1.8 lakh crore of liquidity during Jun-Sept.
  • We foresee INR and 10-year bond yield in the 81-83 and 7-7.2% range respectively, by end-FY24.


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