Latest Economy Observer report from Dun & Bradstreet reveals improvements across industrial activity, cooling inflation, and improving borrowing conditions in India
MUMBAI, India, July 11, 2025 /PRNewswire/ -- Dun & Bradstreet, a global leader in business decisioning data and analytics, has released its Economy Observer report for July 2025. Economy Observer is a monthly report sharing in-depth analysis of key macroeconomic developments in India and provides forecasts for key economic indicators, and insight into the expected direction of the Indian economy. Key economic forecast: Real Economy: Despite slowing in May 2025, India's industrial landscape is expected to see a resurgence, driven by domestic demand and resilience in key sectors. According to Dun & Bradstreet, the Index of Industrial Production (IIP) is expected to have risen by 5.0% in June 2025, a significant jump from 1.2% in May 2025, led by manufacturing and coal production. The manufacturing sector will be supported by increasing consumer demand, tax exemptions introduced in April 2025, and a revival in segments such as consumer durables and capital goods. Simultaneously, coal output has seen a substantial boost, aided by improved logistics and proactive restocking by core industries which is helping to meet the rising needs of industrial activity. Price Scenario: India's inflation trajectory continues to improve, reinforcing price stability. Dun & Bradstreet forecasts CPI inflation to ease further to 1.6% in June 2025, down from 2.8% in May 2025, driven by consistent decline in food prices. Food and beverages inflation has remained subdued, with vegetable and pulse prices stabilizing at lower levels given improved supply conditions and favorable seasonal trends. We expect that the government's proactive release of buffer stocks and the early monsoon will contain food inflation. On the wholesale front, WPI inflation is expected to decline to 0.1% in June 2025, from 0.4% in May 2025, reflecting persistent softness in input costs, subdued global commodity prices, and easing transportation charges, particularly in fuel and freight, which have helped moderate wholesale price pressures. Money & Finance: India's financial markets in June 2025 exhibit stability, supported by softening yields, improving credit conditions, and sustained fiscal discipline. Dun & Bradstreet forecasts the 10-year G-Sec yield to ease further to 6.2% in June 2025, down from 6.3% in May 2025, reflecting improved investor sentiment and reduced borrowing cost pressures. The 91-day T-Bill yield is also expected to decline to 5.6% in June 2025. Bank credit growth has picked up modestly to 9.6% in June 2025, suggesting a gradual revival in credit demand, particularly from MSMEs and retail borrowers, amid improving consumption trends. The RBI's recent 50 basis point Repo rate cut will support lower funding costs and encourage lending. Meanwhile, ongoing digital infrastructure upgrades and enhanced regulatory oversight continue to strengthen the financial ecosystem, reinforcing market confidence and operational resilience. External Sector: The Indian rupee has slightly weakened since May 2025, mainly due to a small rise in the trade deficit and increased non-essential imports. Dun & Bradstreet expects the rupee to average around ₹86.0/USD in July 2025, suggesting a relative stability despite global challenges. However, the rupee might come under pressure because of the narrowing spread between India and U.S. treasury yields, which may contribute to foreign investor outflows. Arun Singh, Global Chief Economist, Dun & Bradstreet said, "India's economy is building momentum, and there is much to be optimistic about. Manufacturing is expected to strengthen, driven by resilient domestic demand and government incentives in place. Inflationary pressures are also easing, due to favorable food supply dynamics, proactive government interventions, and stable energy costs. Monetary policy remains supportive, with the recent rate cut and easing measures to enhance credit flow and reduce borrowing costs, particularly for small businesses and consumers. Financial markets are stable, reflecting improved investor sentiment and liquidity conditions. On the external front, conditions remained comparatively stable, underpinned by strong services exports and sustained capital inflows, despite global uncertainties. Together, these dynamics reflect a resilient macroeconomic foundation, with domestic demand and supportive policies poised to drive near-term growth." D&B's Economy Observer Forecast Variables Forecast** Latest Period Previous period IIP Growth 5.0% June 25 1.2% May-25 2.7% April-25 Inflation WPI 0.1% June 25 0.4% May 25 0.9% April 25 CPI (Combined) 1.6% June 25 2.8% May-25 3.2% April-25 91-day T-Bills* 5.6% June 25 5.8% May-25 6.0% April-25 10-year G-Sec Yield* 6.2% June 25 6.3% May-25 6.5% April-25 Bank Credit 9.6% June 25 9.0% May-25 11.6 % April-25 Exchange Rate (INR/USD) * 86.0 July 25 85.9 June-25 85.2 May-25 *Weekly Average ** Dun and Bradstreet Forecasts. About Dun & Bradstreet: Dun & Bradstreet, a leading global provider of business decisionin
MUMBAI, India, July 11, 2025 /PRNewswire/ -- Dun & Bradstreet, a global leader in business decisioning data and analytics, has released its Economy Observer report for July 2025. Economy Observer is a monthly report sharing in-depth analysis of key macroeconomic developments in India and provides forecasts for key economic indicators, and insight into the expected direction of the Indian economy.
Key economic forecast:
Real Economy: Despite slowing in May 2025, India's industrial landscape is expected to see a resurgence, driven by domestic demand and resilience in key sectors. According to Dun & Bradstreet, the Index of Industrial Production (IIP) is expected to have risen by 5.0% in June 2025, a significant jump from 1.2% in May 2025, led by manufacturing and coal production. The manufacturing sector will be supported by increasing consumer demand, tax exemptions introduced in April 2025, and a revival in segments such as consumer durables and capital goods. Simultaneously, coal output has seen a substantial boost, aided by improved logistics and proactive restocking by core industries which is helping to meet the rising needs of industrial activity.
Price Scenario: India's inflation trajectory continues to improve, reinforcing price stability. Dun & Bradstreet forecasts CPI inflation to ease further to 1.6% in June 2025, down from 2.8% in May 2025, driven by consistent decline in food prices. Food and beverages inflation has remained subdued, with vegetable and pulse prices stabilizing at lower levels given improved supply conditions and favorable seasonal trends. We expect that the government's proactive release of buffer stocks and the early monsoon will contain food inflation. On the wholesale front, WPI inflation is expected to decline to 0.1% in June 2025, from 0.4% in May 2025, reflecting persistent softness in input costs, subdued global commodity prices, and easing transportation charges, particularly in fuel and freight, which have helped moderate wholesale price pressures.
Money & Finance: India's financial markets in June 2025 exhibit stability, supported by softening yields, improving credit conditions, and sustained fiscal discipline. Dun & Bradstreet forecasts the 10-year G-Sec yield to ease further to 6.2% in June 2025, down from 6.3% in May 2025, reflecting improved investor sentiment and reduced borrowing cost pressures. The 91-day T-Bill yield is also expected to decline to 5.6% in June 2025. Bank credit growth has picked up modestly to 9.6% in June 2025, suggesting a gradual revival in credit demand, particularly from MSMEs and retail borrowers, amid improving consumption trends. The RBI's recent 50 basis point Repo rate cut will support lower funding costs and encourage lending. Meanwhile, ongoing digital infrastructure upgrades and enhanced regulatory oversight continue to strengthen the financial ecosystem, reinforcing market confidence and operational resilience.
External Sector: The Indian rupee has slightly weakened since May 2025, mainly due to a small rise in the trade deficit and increased non-essential imports. Dun & Bradstreet expects the rupee to average around ₹86.0/USD in July 2025, suggesting a relative stability despite global challenges. However, the rupee might come under pressure because of the narrowing spread between India and U.S. treasury yields, which may contribute to foreign investor outflows.
Arun Singh, Global Chief Economist, Dun & Bradstreet said, "India's economy is building momentum, and there is much to be optimistic about. Manufacturing is expected to strengthen, driven by resilient domestic demand and government incentives in place. Inflationary pressures are also easing, due to favorable food supply dynamics, proactive government interventions, and stable energy costs. Monetary policy remains supportive, with the recent rate cut and easing measures to enhance credit flow and reduce borrowing costs, particularly for small businesses and consumers. Financial markets are stable, reflecting improved investor sentiment and liquidity conditions. On the external front, conditions remained comparatively stable, underpinned by strong services exports and sustained capital inflows, despite global uncertainties. Together, these dynamics reflect a resilient macroeconomic foundation, with domestic demand and supportive policies poised to drive near-term growth."
D&B's Economy Observer Forecast | |||
Variables | Forecast** | Latest Period | Previous period |
IIP Growth | 5.0% June 25 | 1.2% May-25 | 2.7% April-25 |
Inflation WPI | 0.1% June 25 | 0.4% May 25 | 0.9% April 25 |
CPI (Combined) | 1.6% June 25 | 2.8% May-25 | 3.2% April-25 |
91-day T-Bills* | 5.6% June 25 | 5.8% May-25 | 6.0% April-25 |
10-year G-Sec Yield* | 6.2% June 25 | 6.3% May-25 | 6.5% April-25 |
Bank Credit | 9.6% June 25 | 9.0% May-25 | 11.6 % April-25 |
Exchange Rate (INR/USD) * | 86.0 July 25 | 85.9 June-25 | 85.2 May-25 |
*Weekly Average ** Dun and Bradstreet Forecasts. | |||
About Dun & Bradstreet:
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