Weekly Economic Update

In the local economic news, while April’s exports increased nearly three-fold during the month to US $30.63 billion from a year-ago period, led by growth in sectors like gems & jewellery, engineering goods, the trade deficit for the month expanded to US $15.1 billion. 

An improvement in economic growth drove oil imports to US $10.8 billion more than double of US $4.66 billion, a year ago. According to Commerce Secretary Anup Wadhawan, India is on track to achieve US $400 billion in exports during 2021.   

In other news, wholesale prices increased by 10.49 per cent in April, up from the level of 7.39 per cent in March. According to an official release, ‘Inflation is high primarily because of the rise in crude oil prices, mineral oils viz. petrol, diesel, etc., and manufactured products as compared to the corresponding month of the previous year’. Analysts expect the Wholesale Price Index to rise to 13 to 13.5 per cent in May before declining.  Meanwhile, RBI has also cautioned about the impact of global commodity prices on the inflation outlook over the medium term.  

In the global economic news, China reported a lower-than-expected growth in retail sales during April. While retail sales grew strong at 17.7 per cent from a year ago in April, but was below expectations of 24.9 per cent growth by economists. The sales growth has also nearly halved from a month ago growth levels of 34.2 per cent. Interestingly, even online sales growth slowed to a pace of 23.1 per cent during the first four months of the year. Other economic data points to a brighter picture with industrial output increasing 9.8 per cent in April, in line with expectations.  

In other signs of a global surge in inflation, the UK inflation soared by 1.5 per cent in April, up from a 0.7 per cent increase in March. While most economists don’t expect high inflation prints in the medium term, the recent rise in price increases across the world has raised some concerns about low inflation growth that the global economy has been experiencing in the last few years.