Finance & Economy | News & Insights

CareEdge Economic Pathway – June 2023

Published: July 1, 2023
Author: TEXTILE VALUE CHAIN

Key Highlights:

Global:

  • Despite Fed’s dot plot indicating 50 bps rate hikes in 2023, markets are pricing in one 25 bps rate hike in July.
  • Further ECB and BoE rate hikes expected on account of elevated inflation and strong labour market.
  • Waning recovery in China led to rate cuts by People’s Bank of China.
  • EIA revised upwards Brent crude oil forecast for 2024 to $83.5/bbl.
  • Dollar weakness likely to persist if incoming macro data points to weakness in the economy.
  • US yield curve inversion deepened to levels last seen during the banking crisis in March.

Domestic: 

  • Rural demand showing signs of improvement; discretionary demand remains muted.
  • Kharif sowing impacted by the deficient monsoon in most states in June.
  • Retail inflation eased to a 25-month low of 4.3% in May; core inflation elevated.
  • Net sales of corporates rose 10% (y-o-y) in Q4 FY23, but growth moderated for the 3rd quarter in a row.
  • Operating profit margin rose to a 4-quarter high of 16.4% in Q4 FY23 amid easing price pressures.
  • CAD moderated to 0.2% of GDP in Q4 FY23 from 2% in the previous quarter.
  • Lower goods trade gap, upbeat services exports and remittances supported the moderation in CAD.
  • Services exports jumped 28% steered by exports of software and business services.
  • Rupee traded in a tight range despite depreciation of Chinese yuan.
  • Bond yields rose tracking global yields after major central banks decided to continue raising rates.

CareEdge_Economic_Pathway_-_June_2023

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