Summary of Economic Intelligence Bulletin 30-Sep-2012
2.81 Gold falls for 3 rd Day, down Rs. 50 Falling for the 3 rd day in a row, gold shed Rs.50 to Rs.31,800 per 10 gram on sluggish demand at existing high level. Silver, on the other hand, found fresh buying support from industrial unit and rose by Rs. 650 to Rs. 61,250 per Kg. On the domestic front, gold of 99.9 and 99.5% purity shed Rs. 50 each to Rs. 31,800 and Rs.31,600 per 10 gram respectively. The metal has lost Rs.260 in last two session. 3. EXPORT & IMPORT POLICY 3.28 Engineering exports down 9.7% to $ 4.67 billion in August 2 (Financial Express: 29.9.12) Engineering exports declined by 9.7% to $4.67 billion in August 2012 due to sluggish demand in markets like US and Europe. In August last year, these exports stood at $5.17 billion, according to the data released by the Engineering Export Promotion Council, which is under Commerce Ministry. The exporters are getting lesser number of orders due to weak demand in markets like the US and Europe. The US and Europe together account for over 60% of India’s total engineering exports. 3.29 Steel imports up 40% to 3.35 million tonne (Economic Times: 18.9.12) Country’s steel export went up by a hefty 40% during April-August period of current fiscal to 3.354 million tonne on account of increased demand from sectors including automobiles and consumer durables. The rise, from 2.398 million tonne a year ago, on the back of a significant increase in imports of flat steel products – used in automobiles, white goods and consumer durables – at 2.898 million tonne over 2.1 million tonne in April-August period last year. Non flat products imports also went up during the April- August period to 0.456 million tonne, up 58% compared to 0.289 million tonne a year ago. 4. MISCELLANEOUS 4.42 Retail price inflation returns to double digits (Financial Express: 25.9.12) Justifying the Reserve Bank of India’s cautious monetary stance, consumer price inflation again entered double digits after a gap of 2 months. It rose to 10.03% in August from 9.86% in July, as the rate of price rise in food articles escalated to 12.03%, from 11.53% the previous month. Price pressures were felt more on urban areas, where inflation was 10.19%, compared to 9.9% in the rural areas. However, milk and vegetable inflation was higher in rural areas. Inflation in vegetables came down to 20.79% in August from
27.33% in July. However, the rate of price rise in pulses went up to 16.04% from 12.49% in the previous month. Fuel and light inflation stood at 7.55% in August, up from 7.36%in July. 4.43 Core Sector grows at 2.1% in August 3 (Business Standard: 19.9.12) The out put of 8 infrastructure industries rose 2.1% in August, higher than 1% in July but not enough to offer hope of revival in industrial production. These 8 industries – coal, crude oil, natural gas, refinery products, fertilizers, steel, cement and electricity – together have a 38% weight in the index of industrial production. The production of cement fell 2.4% from a year ago while that of steel rose just 1.8%, according to data released by Ministry of Commerce and Industry on 28 th September. In August 2011, core sector index had risen 3.8%. The output of 8 infrastructure industries rose 2.8% between April and August, compared with 5.5% in the corresponding period a year ago. Crude oil production was down 0.6% but refinery out put rose 8.4% in August from a year ago. 4.44 Current Account Deficit in quarter 1 at 3.9% of GDP (Economic Times: 29.9.12) India’s current account deficit (CAD) for the first quarter ended June declined to $ 16.4 billion from 17.4 billion in June 2011, on moderation in trade deficit and rise in remittances from foreign Indians. However, as a production of gross domestic product (GDP), it rose marginally to 3.9% for Q1 of FY 13 from 3.8% for Q1 of 2011-12. This reflects moderation in economic growth and rupee depreciation of about 17% against the dollar over the corresponding quarter. The current account deficit (CAD) for Q4 ended March 2012 was 4.5%. The balance of payment situation improved, albeit on a small scale after two Quarters. There was net accretion to foreign exchange reserves of $0.5 billion in Q1 of FY13 compared with drawdown of $5.7 billion in Q4 of FY 2012. In Q3 (December 2011), it was to the tune of $12.8 billion.