Thread by @KadyanSanjana

Six months into a chaotic whirlwind called 2020~ reflection of India’s macrovitals and cues for future trajectory
Check out our new edition of Macroeconomics of Covid in India series with @tulsipriya_rk #EconTwitter #macroIndiaupdate
Real activity inching to preCovid levels.

How are the economies of states recovering?
YoY contraction in power consumption relatively eased since mid-June across most states including Covid hotspots like DL, MH, WB and UP. JH, SKM, TLG and RJ showed greatest improvement in the fortnight ending 5th July. @tulsipriya_rk

ETC collections inched closer to pre-COVID19 levels in June across all states. ASM, BHR, J&K, JH, MP, OR, UP and WB reported greatest pick up in second fortnight of June compared to pre-COVID-19 period. @tulsipriya_rk

Moderate recovery in value of E way bills in June relative to previous year across all states including COVID-19 hotspots. Andaman & Nicobar, Sikkim and Telangana witnessed improvement in the second fortnight of June. @tulsipriya_rk

PMI Manufacturing and Services for India picked up in June compared to May. Still in contraction zone, though. Manufacturing inched closer to 50 level. @tulsipriya_rk

India on the move in June. Railway passenger earnings moved into positive territory in first 20 days of the month, freight earnings improved reaching closer to 2019 levels. Tracking global trends, aviation activity also picked up in second half of June. @tulsipriya_rk

Rural India picture- Work demanded under MGNREGS sharply rose in June. 44.1 person days of work generated in the month, 37% higher YoY, positive for rural demand. @tulsipriya_rk

India’s food supply chains have recovered post Covid. Mandi arrivals for major commodities reached 2019 levels barring few. Retail prices, however, remain elevated YoY. Tomato prices emerging as concern amid rains, diesel price rise and recent supply fall @tulsipriya_rk

How does our external sector look? Forex reserves robust at USD 505.6 bn. Rupee stabilising since mid-June after sharp depr in Mar and Apr amid resurgence in FPI flows and relatively lower dollar purchases by RBI in recent fortnights @tulsipriya_rk

Consumption of petroleum products picked up in May compared to Apr.Oil prices rising since May amid prospects of global economic recovery and supply cuts. Still below pre-Covid levels. Consequently, petrol and diesel prices sharply picked up in June in metros. @tulsipriya_rk

Gold imports modestly recovered in May after sharp decline in Apr. Yellow metal continued to appreciate in the fortnight ending 5th July amid rising Covid cases. @tulsipriya_rk

Global composite PMI, still in the non-expansionary zone,improved to 47.7 in June with improvement seen across all advanced countries and expansion witnessed in China. @tulsipriya_rk

Private consumptn trends- vehicle regstratns increased by more than 350 per cent in June over May, reaching 60 per cent of pre-COVID and previous year levels. Digital retail transactns picked up. Surge in consumptn and FMCG equities continued in fortnight gone by @tulsipriya_rk

Metal equities gained by 2.2% amid positive data releases of China economic indicators- a major consumer. Infrastructure and capital goods equities also gained by 3.6% and 3.3% respectively in the fortnight gone by, reflecting positive investment sentiment.
@tulsipriya_rk

Monetary-bank credit growth remains tepid at 6.25% YoY in fortnight ending 19 June. Lesser amount of funds parked in reverse repo in the following fortnight portends well for upcoming credit data. Call money rate unchanged in fortnight, 14 bps below repo @tulsipriya_rk

Centre’s fiscal deficit (PE) in May increased over April. 10 year G-Sec yields falling since end April with marginal rise since end May to reach 5.89% in fortnight ending 5th July, yield volatile last fortnight with market supply fatigue⬆️ and RBI special OMO⬇️ @tulsipriya_rk

Borrowing trends:Centre’s gross and net borrowings upto 26th June increased by 1.5 and 1.2 times respectively compared to 2019 levels. States’ gross and net borrowings also increased by 1.9 and 2.2 times respectively YoY. Centre’s WMA loans declined states rising. @tulsipriya_rk

Fiscal~DBT transactions through APBS increased by 42.5 per cent YoY in June, in value terms, though lower by 17.4 per cent compared to May.
@tulsipriya_rk

While foreign investors have been pulling out money from government debt since the pandemic struck, banks have been eager to purchase it with their excess SLR portfolios increasing.
@tulsipriya_rk

Monetary~Repo rate cut by 115 basis points since 27th March 2020, reverse repo rate cut by 155 bps with the asymmetric cuts aimed at using LAF corridor as an instrument of monetary policy.
Monetary policy transmssn improving gradually @tulsipriya_rk

Financial markets- Sensex and Nifty-50 ended with strong gains for three fortnights in a row despite rising COVID cases, possibly driven by improving domestic and global economic indicators and de-escalation of border tensions. @tulsipriya_rk

Financial markets~Corporate bond yields also continued to ease for two consecutive fortnights to reach 7.1 per cent, on average, in the fortnight ending 3rd July on account of RBI’s targeted long term repo operations.

Future economic recovery critically depends on flattening the infection curve. Covid cases sharply picked up as India unlocked in June. Recoveries picking up as well across states-strongest recoveries as on 5th July in DL, RJ, MP, GJ, HR, PB and BHR. KA concern. @tulsipriya_rk

India’s case fatality rate(CFR) stood at 2.8% as on 5th July, lower than global average of 4.7%. High fatality rates concentrated in hotspots like DL, GH,MH,MP,WB and UP with them witnessing ⬇️ in CFR in the second fortnight of June. Recent ⬆️ in PB, HR, JnK, TN @tulsipriya_rk