Winning Bizness Economic Desk

Driven by high food prices, India’s Consumer Price Index (CPI)-linked inflation climbed up to 5.49 per cent in September of this year.

The number stood at 3.65 per cent in the previous month of August, according to government data released earlier this month.

In September of last year (2023), the retail inflation number had come in at 5.02 per cent.

“Year-on-Year (YoY) inflation rate based on the All India Consumer Price Index (CPI) for the month of September 2024, is 5.49 per cent. The corresponding inflation rate for rural and urban are 5.87 per cent and 5.05 per cent, respectively. It is likely that the increase in inflation rate for the month of September 2024, is due to high base effect and weather conditions,” the Ministry of Statistics and Programme Implementation (MoSPI) said.

The YoY inflation rate based on the All India Consumer Food Price Index (CFPI) number is 9.24 per cent for September 2024.

The corresponding inflation rate for rural and urban is 9.08 per cent and 9.56 per cent, respectively, it added.

Forex Reserves Slide for Second Straight Week

The country’s foreign exchange reserves moved southward by USD 10.75-billion to USD 690.43-billion for the week ended October 11.

This is a decline for the second straight week and additionally it is one of the largest decreases in recent times, the country’s apex bank, the Reserve Bank of India (RBI) said.

In the previous reporting week, the reserves had slid by USD 3.709-billion to USD 701.176-billion.

As at end-last month (September), the reserves had hit an all-time high of USD 704.885-billion.

For the week ended October 11, the foreign currency assets (FCAs), a major component of the reserves, decreased by USD 10.542-billion to USD 602.101-billion, the Reserve Bank of India data showed.

Expressed in dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US units like the Euro, the Pound and Yen held in the foreign exchange reserves.

Gold reserves too slid southward by USD 98-million to USD 65.658-billion during the week, the country’s apex bank said.

India’s reserve position with the International Monetary Fund (IMF) was down by USD 20-million to USD 4.333-billion in the reporting week, the RBI’s data showed.

August Industrial Output Contracts for the First Time Since October 2022

India’s industrial production contracted for the first time in August on an annualised basis since October 2022.

The Ministry of Statistics and Programme Implementation (MoSPI) said that on a Month-on-Month (MoM) basis, the Index of Industrial Production (IIP) declined 0.1 per cent in August of this year.

This marks the first decrease since March, highlighting the on-going challenges in the manufacturing sector amid fluctuating economic conditions.

The data reveals that the three major sectors—mining, manufacturing and electricity—were confronted with varying degrees of challenges.

The mining sector experienced a significant contraction of 4.3 per cent due to heavy rainfall adversely impacting operations.

A point to note here is that in contrast, the manufacturing sector managed a small growth of one per cent while electricity production fell by 3.7 per cent.

The IIP for August stood at 145.6, slightly down from the 145.8 in the same month last year.

What requires highlighting here is that within the manufacturing landscape, certain industries exhibited resilience, with the manufacturing of basic metals contributing positively at three per cent, followed by the manufacturing of electrical equipment at 17.7 per cent.

Primary goods and consumer non-durables registered declines of 2.6 per cent and 4.5 per cent, respectively, while capital goods and intermediate goods expanded by 0.7 per cent and three per cent.

The infrastructure/construction goods sector too exhibited a northward movement of 1.9 per cent.

Institutional Investment in Real Estate Up 31 Per Cent in Jan-Sept Period, Says Report

Institutional investment in Indian real estate increased 31 per cent on a Year-on-Year (YoY) basis to USD 4.61-billion in the January-to-September period of this year amid strong consumer demand, real estate consultant Vestian said in a report.

In its report—Investment in Indian Real Estate—it observed that funds’ inflow from institutional investors in the first nine-months of this year (2024) has surpassed the total of last year (2023).

“Investors have shown confidence in India’s growth story on the back of robust GDP growth. As a result, the real estate sector witnessed increased participation from foreign investors which led to institutional investments touching a billion mark in Q3 2024,” Mr Shrinivas Rao, CEO of Vestian, said.

Domestic investors also actively participated, supported by rapid infrastructure development across the country, he said.

During the latest July-to-September quarter, institutional investment in real estate rose 41 per cent to USD 960.8-million from USD 679.9-million in the year-ago period.

Inflows, however, fell sharply from the June quarter that saw an investment of USD 3,116.3-million.

Despite this significant quarterly decline of 69 per cent, the consultant said that the outlook remains positive.

The southern city and capital of Tamil Nadu, Chennai, received the highest investments during Q3 2024, with a 48 per cent share.

The majority of investments in the city were concentrated in industrial and warehousing, commercial and residential sectors, the report said.

Passenger Vehicles, Two-wheelers Lead India’s Automobile Exports in April-Sept Period

The country’s automobile exports in the first six-months of the current fiscal year moved northward at a healthy 14 per cent on a Year-on-Year (YoY) basis, driven by gains in shipments of passenger vehicles (PVs) and two-wheelers.

According to the Society of Indian Automobile Manufacturers (SIAM) data, the overall exports in the April-to September period stood at 25,28,248 units, up 14 per cent as compared with 22,11,457 units in the year-ago period.

“Key markets like Latin America and Africa which had slowed down for various reasons, have bounced back. This has been the main reason for exports coming back,” SIAM’s President Mr Shailesh Chandra said.

He was replying to a query on the reasons for the bouncing back of vehicle exports in the April-to-September period.

Various African nations and other regions faced challenges due to devaluation of currencies. This impacted vehicle shipments as the nations focussed on import of essential items.

The overall exports stood at 45,00,492 units in the last fiscal year as compared to 47,61,299 units in FY 23.

Total passenger vehicles shipments moved up 12 per cent YoY to 3,76,679 units in the first-half (H1) of the current fiscal year as against 3,36,754 units in the September quarter of FY 24.

Two-wheeler exports rose 16 per cent YoY to 19,59,145 units in the April-to-September period this fiscal as compared to 16,85,907 units in the year-ago period.

Scooter shipments increased 19 per cent to 3,14,533 units while motor-cycles’ exports rose 16 per cent to 16,41,804 units during the period under review.

Commercial vehicles exports rose 12 per cent YoY to 35,731 units in the first six-months of the fiscal year.

Three-wheeler shipments, however, declined one per cent during the period to 1,53,199 units as compared with 1,55,154 units in the April-to-September period of 2023-24 fiscal year.