Weekly Economic Update

Weekly Economic Update

Srinivasa Sharan
/ Categories: Trending, Mindshare

Local economic news: 

The automobile retail sales for the month of May declined by 55 per cent from April as the impact of localised lockdowns took hold. Sales also declined 71 per cent from May 2019 levels (May 2020 sales are not comparable as the country was in national lockdown for some part of 2020). While two-wheeler sales dropped 71 per cent from its two-year level, passenger vehicle sales too declined 64 per cent over the same period. However, there are expectations of a turnaround in June as the first nine days of the month has experienced an uptick in sales on the due to pent-up demand from the month of May.

Other news: 

RBI has announced the third tranche of its bond acquisition programme, which is scheduled for June 17. Under the Rs 40,000 crore bond purchase programme, Rs 10,000 crore will be set aside for the purchase of state development loans (SDLs). Besides, the central bank has committed to purchase Rs 1 lakh crore during the second quarter of FY 2022.    

RBI announcement: 

The central bank reported that consumer confidence in May fell to an all-time low reading of 48.3 compared to 53.1 in March. The survey also showed that consumers have turned pessimistic about the year ahead as well with the future expectation index (FEI) falling to 96.4 in May.   

Global economic & market news: 

US inflation continued to heat up in May with headline inflation at 5 per cent on a YoY basis. This rate of inflation is the highest since August 2008. Meanwhile, the core inflation rate stood at 3.8 per cent on a YoY basis to a 3-decade high. While a few market watchers have expressed concern over the rising inflation, the US central bank has assured the markets that these inflation numbers are just transitory or temporary in nature.  

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