The key high-frequency economic indicators for March 2022 are expected to paint a mixed picture of the economy’s health.
The high-frequency indicators include passenger vehicle and motorcycle production, the output of Coal India, non-oil merchandise exports, ports cargo traffic, rail freight, GST e-way bills, finished steel consumption, and non-food bank credit of scheduled commercial banks, amongst others
Accordingly, a low base related to the onset of the second wave of last year may partly counteract disruption caused by geopolitical factors for some sectors over the next few weeks.
“Early data for March 2022 is mixed,” rating agency ICRA said.
As per the agency, while the year-on-year (YoY) growth in electricity demand has eased to 3.7 percent on March 1-15, 2022 from 4.5 percent in February 2022, the sales of petrol and diesel of state refiners have witnessed robust sequential growth in the first half of March 2022.
Besides, vehicle registrations stood at 0.83 million during March 1-17, 2022, equivalent to 50 percent and 60 percent, respectively, of the year-ago and prior month levels.
“However, the ongoing Russia-Ukraine conflict and the resultant surge in key commodity prices, as well as the supply chain implications of the renewed lockdowns in China, do not augur well for the performance of inbound or outbound cargo shipments at ports and sectors such as automobiles, which are partly dependent on key raw materials provided by either of these nations, in the absence of any other alternatives.”
In last month’s data, the agency said that despite the lifting of state-wise restrictions after the rapid abatement of the third wave of Covid-19 in India, the YoY performance of nine of the 16 high-frequency indicators worsened in February 2022, relative to January 2022.
However, eight of the 14 non-financial sectors exceeded their pre-Covid volumes in February 2022, in line with the previous month.
Moreover, the daily average generation of GST e-way bills scaled a new peak in February 2022, indicating a healthy rebound in economic activity.
“With the modest uptick in the YoY growth of electricity demand, amidst a dip in the YoY performance of CIL, we expect the IIP growth to remain sub-2 percent in February 2022.”
“In month-on-month (MoM) terms, as many as nine of the 14 non-financial indicators reported a decline in February 2022, partly attributed to the fewer days in February 2022, compared to the previous month.”
