DON'T WORRY, BE HAPPY!

Major macro economic data coming in today, the last day of November’22.

First the fiscal deficit – it widened to Rs 7.58 lakh crore in April-October, accounting for 45.6% of the full-year target v/s 36.3% (YoY).  The Govt is targeting a fiscal deficit of Rs 16.61 lakh crore for FY23, or 6.4% of GDP.

We also saw the core sector output data - growth rate in the production of eight key sectors slowed down to 0.1% in October against 8.7% (YoY).

Production growth rate of eight infrastructure sectors -- coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity -- was 8.2% during April-October FY23 v/s 15.6% (YoY).

Negative growth came in from - crude oil, natural gas, refinery products, and cement.

On the Q2GDP front, it came in at 6.3% v/s 8.4% (YoY)the numbers were more or less as was widely expected but what came as a major disappointment was the fall in manufacturing – it came in at -4.3%, much much more that what any analyst or fund anticipated. Also agriculture did well at 4.6% but it was much below estimates, indicating the impact of late sowing.

The sector which kept the flag flying in the GDP was the service sector – alone contributing over 9% and this is reassuring; its like a cue for the RBI to maybe take a pause and look where things are headed. Many are expecting the aggression of rate hikes to come down and soon take a pause – maybe its not yet time to take the foot off the brakes. 25 bps to 35 bps are the numbers doing the rounds. We will know for sure only on 7^th Dec.

Well, all the data suggests that things are not exactly hunky dory but the silver lining here – India is doing much better vis-a-vis the world economies.  In USA, recession is pretty much the omnipresent topic of discussion but here, we are still doing much better; once again the domestic demand is very good, enough for us to stay afloat and sailing.

These GDP numbers were good but fall in manufacturing is worrisome; imports are up but exports remain a laggard but then, as said earlier, domestic consumption is more than robust.

Yeah, we will sail through, keep the jackets on! After all the markets have never been this high ever, have they?