The world economic recovery continues, more or less as predicted.

Growth forecasts are nearly unchanged since the January 2011

World Economy
WEO Update can be summarized in three numbers:
It is expected that world economy to grow at about 4

percent a year in both 2011 and 2012.

Advanced economies growing at only 2 percent ,

while emerging and developing economies grow at a much higher 6 percent.

World Economy
The recovery, however, remains unbalanced.
In most advanced economies, output is still far below

potential. Unemployment is high, and low growth implies that it will remain so for many years to come.
The source of low growth can be traced to both pre

crisis excesses and crisis wounds: In many countries, especially the United States, the housing market is still depressed

World Economy
The crisis itself has led to a dramatic deterioration in

fiscal positions, forcing a shift to fiscal consolidation while not eliminating market worries about fiscal sustainability.
in many countries banks are struggling to achieve

higher capital ratios in the face of increasing nonperforming loans.

World Economy
The problems of the European Union periphery,

stemming from the combined interactions of low growth, fiscal woes, and financial pressures, are particularly acute.
In emerging market economies, by contrast, The crisis

left no lasting wounds. Their initial fiscal and financial positions were typically stronger, and the adverse effects of the crisis were more muted.

World Economy
Exports have largely recovered, and whatever shortfall

in external demand they experienced has typically been made up through increases in domestic demand
Capital outflows have turned into capital inflows, due

to both better growth prospects and higher interest rates than in the advanced economies.

World Economy

Inflation

World Economy

World Economy

Domestic Economy
On the domestic front, growth is likely to moderate while inflation is likely to remain firm due to rising commodity prices.
This is expected to have an adverse impact on the fiscal consolidation process. The current account deficit is likely to remain elevated due to rise in imports

resulting from higher oil and commodity prices

increase volatility in capital flows. High input prices and interest costs may result in downward pressure on

margins of corporate.

The aggregate impact of moderately paced global recovery, domestic growth moderation, upside risks to inflation and higher interest rates on the financial sector is likely to remain somewhat adverse during the year.

Domestic Economy

Domestic Economy
The increase in the growth rate of real GDP during

2010-11 was mainly due to the sharp improvement in the growth of agriculture & allied activities, even as the contribution of industry and services were somewhat lower

Industrial growth decelerates, partly reflecting moderation in investment demand

Commodity Prices

Housing Prices

CAD to remain stretched due to combined impact of high global oil prices and moderation of growth in exports

FDI & FII

Higher interest costs and commodity prices may put pressure on corporate margins

Concluding Remarks
Notwithstanding

some improvement in the global macroeconomic environment and associated global risks, considerable uncertainties contribute to the continuance of global risks at elevated levels. Growth is expected to decline among most advanced as well as emerging and developing economies during the current year. Concomitantly, world trade is also likely to witness deceleration. Despite some moderation, global imbalances continue to persist implying that the process of rebalancing may take long and may require stronger policy measures. Reemergence and persistence of sovereign debt problems has posed additional challenges and is expected to prolong global recovery.

Concluding Remarks
Slackening of global recovery, high oil and commodity

prices, sovereign debt problem in the Euro area periphery intensifying and some slowdown in domestic investment demand may pose downside risks to the growth of the domestic economy. High prices of commodities, including oil, are also expected to adversely impact the current account balance, fiscal balance, households spending, and margins of corporates which may collectively pose some downside risks to the performance of the financial sector. Elevated inflation rate and rising interest rate may also impact on the balance sheet of financial entities.

Analysis

Analysis

Analysis

The Big Public Offer Impact

Inside OUt

Delisting Trick

Timing The Bad News

Small Wonders

Economic Cycle

Market Cycle

Macro Economic Variables

GDP
Interest Rates Consumer Spending

Government Spending
IIP numbers Inflation FII Exchange Rate Movements

GDP and Sensex

GDP and Sensex

Stock Market and Interest Rates

Interest Rates and Markets

Banking sector is likely to benefit most due to

high interest rates

Sectors like pharmaceuticals, FMCG, IT etc are some

of the least affected sector, look towards directing your investment in such sectors.
If interest rate continues to rise for a longer

duration then it will have an all round negative impact on the economy, leading it into a recessionary mode.

Stock Market and Consumer Spending

Markets and consumer Spending

Stock Market and Government Spending

Government Spending and Markets

Government Spending and Markets

Government takes strong actions by increasing its

spending on key sectors and also increasing its own consumption expenditure to revive the falling demand situation in the economy.
This is exactly what happened in 2008-09; the government

increased its expenditure on key sectors like agriculture, irrigation, transport, communication, energy etc. by approx 42% to Rs. 2,04,129 Cr. (much more than the average growth of 17.4% on key sectors during 2000-2007). It also increased subsidy expenditure by approx 82% to Rs. 1,29,243 Cr.

Stock Market and IIP numbers

Stock Market and IIP numbers

Stock Market and IIP numbers

Manufacturing (79.36%), Mining & Quarrying

(10.47%) and Electricity (10.17%)

Inflation and markets

Inflation and Markets

Sensex and FIIs

FIIs and Share Prices

Exchange Rates

Exchange Rates
Every 1% movement in the Rupee against the US

Dollar has an impact of approximately 50 basis points on operating margins Infosys Annual Report