Highlights:
- Demand recovery remains underway, Rural demand too points towards some improvement.
- Prospects of good monsoon and start of Kharif sowing auger well for rural demand recovery.
- Kharif sowing rose 33% (y-o-y) led by pulses, oilseeds, and cotton.
- Distribution of rainfall remains a key monitorable for Kharif sowing.
- Core sector growth remained healthy at 6.5% during 2M FY25 (Vs 4.9% in the same period last year).
- CPI inflation moderated marginally to 4.75% in May (Vs 4.8% in April).
- Core inflation came at a multi-year low of 3.1% in May.
- Food inflation held steady at an elevated 7.9% with double-digit inflation seen in vegetables and pulses.
- Current account recorded surplus of 0.6% of GDP (Q4FY24), best performance in 11 quarters.
- FY24 CAD came sharply lower at 0.7% of GDP (Vs 2% in FY23).
- BoP recorded a surplus of USD 63.7 billion in FY24 Vs deficit of USD 9.1 billion in FY23.
- Exports of software services and business services rose by a strong 9% and 10%, respectively in FY24.
- Healthy services exports and remittances to keep CAD manageable around 1% of GDP in FY25.
- FPI’s turned net buyers in June.
- Average liquidity deficit narrowed in June. Strong FPI inflows supported liquidity conditions.
