Weekly Economic Update
In the local economic news, the economy was on the mend during the quarter ending December 2020, with GDP growth increasing 0.4 per cent as compared to a contraction of 7.5 per cent during Q2FY21 (September-ending quarter).
In other news recaps for January, the services sector indicator from Markit Purchasing Managers' Index came in with a reading of 52.8 in January, compared to 52.3 in December. The exports for the month expanded by 6.16 per cent from a year ago to US$ 27.45 billion with the country posting a trade deficit of US$ 14.54 billion compared to US$ 15.3 billion, a year ago. Passenger vehicle sales increased 11.4 per cent in the month, driven by two-wheeler and utility vehicle sales. Bank credit also continued the turnaround by growing 6.5 per cent during the month compared to a year ago.
On the global front, while initial US jobless claims eased to 7.30 lakh for the week-ended February 22, bond yields continued their march higher. The benchmark 10-year bond yields are now around 1.50 per cent up from the 1.28 per cent level at the end of last week. This led to a decline in the global equity markets for the week.
Another signal of economic strength was the US Durable Goods orders, which increased and gave a better-than-expected 3.4 per cent (expected was 1 per cent growth) during January, with core capital goods orders expanding to 0.5 per cent.