ECONOMIC UPDATE

GDP data for Jan to march 2021 key indicator:- Our GDP data has improved from -23.9% to -7.5 % but the quarter from Jan 2021 to March 2021 would be keenly watched by the Foreign investors who are betting on the fact that the GDP may turn out to be in positive zone.

Record FII moneys in 2020:-  The year 2020 saw highest inflows from FII of about Rs. 1,58,000 crore which is highest since 1992 when they were allowed in the Indian markets. Such flows will not sustain in 2021 and there may be crash in the markets.

Fed to be key factor affecting global liquidity:- Fed Reserve has indicated that interest rates will be lower for another 3 years which is the key to global liquidity. But the yields are already at 1 % for 10 year bond which means that the in 2021 end they may touch 2 % bond year for 10 year bond which may end the low interest rate regime.

US may opt for another economic package:-  JEO BIDEN took on 20^th January 2021 as the President and he might also announced another economic package USA is also facing 10 per cent unemployment rate. This may further add to the global liquidity and thus push up artificially the stock markets.

IIP index back to negative zone:-  the IIP index after coming to positive zone to 3.6 % has again entered the negative zone -1.9 % which means that still we have to wait and watch for the economy to fully settle down and be stable.

India unemployment still high:- Indian Unemployment is still around 9 % which means lot needs to be done for more job creation and also restoring the jobs of those who have lost their jobs. Unless we add more income generators in the system, the economy will not be able to sustain.