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Overview: The Capitalmind Flipbook, May 2025, offers insightful analysis as inflation hits its lowest since 2016 and credit dynamics evolve due to regulatory changes. Beneath the surface, numbers reveal intriguing trends. Despite geopolitical tensions, Indian markets showcase remarkable resilience. This Flipbook connects the dots between charts, trends, and macro signals, providing a comprehensive understanding of the current financial landscape.

Key Highlights:

Inflation

• CPI Falls Further to 3.16%. While, Core CPI Inches Upto 4.24%, Shows Signs of Flattening
• Fuel Inflation Highest in Recent Months Despite Oil Treading Lower Prices
• Personal loans continue to grow at 14% YoY same as last month. Agriculture fell from 11.4% YoY to 10.4% YoY. However, Services grew from 13% YoY to 13.4% YoY. Overall Industry Credit Growth is at 8% YoY, a bit higher than last month’s 7.3% YoY
• Credit Card Growth Continues to Slow Growth, fallen from 11.2% YoY last month to 10.6% YoY this month.
• Unsecured Personal Loans Continue to Grow in Single Digits
• Priority housing which is also the lower cost housing is struggling to pick up, whereas the High Cost Housing loans are growing at 21%
• Loans against Gold have doubled, possibly on the back of the rallying Gold prices

RBI Credit

• Rapid rise in education personal loans post the pandemic for both men and women. Women Are Taking 2x Education Loans Compared to Pre-Pandemic Levels
• Average loan ticket size of House Hold Consumer Durable fell from more than a lac to around 15k, primarily driven by the adoption of EMIs to finance durables purchases.
• Credit Card Growth Struggling to Return to Pre Pandemic Levels
• Fastest growth was during the best times for the Auto industry before 2018. Post that, vehicle loan slump accompanied by lower auto sales in 2018, and 2019 took place

The Tale of Gold

• Gold returns in FY25 in US$ terms has been 41%, and in INR it has been 33%

Forex Reserves

• Rupee Has Been Strengthening Against the USD, But Weakening Against the Pound and Euro
• The RBI’s Forex Reserves are on the rise again
• The RBI has ramped up its gold purchases while slowing foreign currency accumulation. This shift likely reflects concerns that buying U.S. dollars could weaken the rupee
• Gold’s weight in India’s Forex reserves has increased
• India’s foreign currency reserves have recorded a modest recovery following the decline observed at the end of last year
• India’s external assets rose to USD 1,078.7 billion in 2024, led by higher forex reserves and increased direct investments abroad
• India’s total external liabilities grew to USD 1,443.2 billion in 2024, reflecting increased foreign capital inflows and higher external borrowings

Markets & Macros

• Nifty 50 delivered a positive 2% return in the month of May. There were war related concerns in the month, but the impact was quite negligible. Experts say that the market had already priced in many factors, and the focus was more towards the ongoing earnings season and less towards speculation
• After a disastrous start to the year, midcaps have seen a robust recovery in March, April and May
• NIFTY SIP Returns Moderated to 12.9%
• April Broke the FPI Net Outflow Trend. As April Saw the Biggest Debt Outflow by FPIs in 5 Years

Liberalized Remittance Scheme

• Outward remittances under the Liberalized Remittance Scheme (LRS) remained elevated at USD 27 billion in FY25 (till February), though marginally lower than the peak of USD 31.7 billion in FY24
• Investments in equity and debt through the LRS stayed robust at USD 1.39 billion in FY25 (till February), slightly below the record USD 1.51 billion in FY24
• Deposits under the LRS fell sharply to USD 532.1 million in FY25 (till February), down from FY24 and FY23
• Foreign travel spending touched USD 15.8 billion by February FY25, and with March data pending, the final figure will likely surpass last year’s record.

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