1

Macroeconomic Indicators

• Workforce participation• Balance of payments• Monetary aggregates/price level• Exchange rate

2

Balance of Payments

Average 2000-01 to 2009-10

Average 2003-04 to 2007-08

2008-09 2009-10 2010-11 2011-12

-15

-10

-5

0

5

10

c) Trade Balance/GDP (%)

d) Invisible Balance/GDP (%)

e) Current Account Balance/GDP (%)

f) Net Capital Flows/GDP (%)

Source: Reserve Bank of India

3

Monetary Aggregates/Price Level

Average 2000-01 to 2009-10

Average 2003-04 to 2007-08

2008-09 2009-10 2010-11 2011-120

5

10

15

20

25

a) Reserve Money (M0) (% change)b) Narrow Money (M1) (% change)c) Broad Money (M3) (% change)

Average 2000-01 to 2009-10

Average 2003-04 to 2007-08

2008-09 2009-10 2010-11 2011-12*0

2

4

6

8

10

12

14

d) WPI Annual Average (% change)e) Inflation rate: all items (% change)

Source: Reserve Bank of India

4

Foreign Exchange

Average 2000-01 to 2009-10

Average 2003-04 to 2007-08

2008-09 2009-10 2010-11 2011-1238

40

42

44

46

48

50

52

End of PeriodAverage

•Growing current account deficit (Exports<Imports)•Capital account lagging behind•Money supply growth slowing (holding down prices)•De Facto peg unsustainable

Source: Reserve Bank of India

5

Forex Risk

JAN2000 JAN2001 JAN2002 JAN2003 JAN2004 JAN2005 JAN2006 JAN2007 JAN2008 JAN2009 JAN2010 JAN2011 JAN20123840424446485052545658

Rupee/Dollar

Rupee/Dollar

JAN2000 JAN2001 JAN2002 JAN2003 JAN2004 JAN2005 JAN2006 JAN2007 JAN2008 JAN2009 JAN2010 JAN2011 JAN20120.6

0.7

0.8

0.9

1

1.1

1.2

Euro/Dollar

Euro/Dollar

Source: Wharton Research Data Service