Latest Economy Observer report from Dun & Bradstreet reveals India's steady rise as inflation eases and financial markets strengthen

PRNewswire
Mumbai (Maharashtra) [India], June 9: Dun & Bradstreet, a global leader in business decisioning data and analytics, has released its Economy Observer report for June 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: India's GDP in the final quarter of FY25 expanded by an impressive 7.4% from the provisional estimate of 6.5%. Looking ahead, D&B forecasts a moderation in India's Industrial Production Index (IIP) to 1.8% in May from 2.7% in April-- reflecting a combination of cyclical and sector-specific weaknesses. Domestic demand is robust, and international ties are improving. Industrial growth faces short-term headwinds. These include base effects, inventory corrections (destocking), and supply disruptions caused by the early monsoon season. Urban demand is expected to pick up due to tax exemptions taking effect from April, while an early monsoon should boost the kharif season, supporting rural consumption--especially durables and e-commerce.
Price Scenario: India's inflation trajectory continues to improve, reinforcing price stability. Dun & Bradstreet forecastsCPI inflation to follow its current downward trajectory to 3.0% in May from3.2% in April, driven primarily by sustained disinflation in food prices. Food and beverages inflation has cooled down to its lowest in over a year, led by sharp corrections in vegetables and pulses. While unseasonal weather caused intermittent volatility, proactive release of buffer stocks by the Food Corporation of India helped contain cereal inflation and dampen broader food price pressures. Dun & Bradstreet forecasts WPI inflation to fall to 0.7% in May, from0.9% in April, reflecting weak input cost pressures, subdued global commodity prices, and a supportive base effect. Notably, the recent surge in global copper prices has yet to significantly impact wholesale price indices but may influence industrial cost structures in the coming months.
Money & Finance: India's financial markets in May 2025 exhibit growing stability, supported by easing inflation, improved liquidity, and a stronger fiscal position. Dun & Bradstreet projects the 10-year G-Sec yield to ease to 6.4% and the 91-day T-Bill to 5.9%, reflecting better borrowing conditions. The RBI's Rs40,000 crore OMO purchase and a record Rs2.7 lakh crore dividend transfer to the government have bolstered liquidity and reduced bond supply pressures. Bank credit growth has moderated to 10.0%, indicating recalibrated demand and cautious lending amid tighter digital lending oversight. The RBI's decision to raise the Contingent Risk Buffer to 7.5% signals growing confidence in financial system resilience. Structural reforms, including the launch of '. bank.in' and 'fin.in' domains, enhance cybersecurity in digital finance, while formalization trends are curbing currency circulation.
External Sector: In May 2025, the Indian rupee appreciated to Rs85.3/USD, Dun & Bradstreet forecasts Rupee to stabilize around Rs85.4 in June. The currency's strength was supported by reduced capital outflows, RBI's calibrated liquidity support and rate adjustments, which reinforced monetary stability, as well as a weakening of the dollar. A narrower trade deficit due to lower non-essential imports and sustained FII inflows improved the balance of payments. A steepening yield curve and notable declines in 5- and 10-year yields underscored strong demand for Indian debt. Going forward, the rupee is well positioned to defend its gains, backed by robust fundamentals and investor confidence.
Arun Singh, Global Chief Economist, Dun & Bradstreet, said, "India's short-term economic outlook remains strong as GDP in the final quarter of FY25 expanded by an impressive 7.4% --a symbolic milestone that reinforces investor confidence. A pick-up in urban consumption--spurred by pre-festive spending, tax reliefs, and a favorable base--is cushioning overall growth. Meanwhile, an early and widespread monsoon is expected to lift rural demand, particularly in agri-linked sectors. Headline inflation remains manageable, aided by easing food prices and supply-side interventions. Financial markets continue to show momentum, with strong equity performance, stable bond yields, and robust foreign portfolio inflows. The rupee has appreciated mildly, reflecting improved current account dynamics and positive sentiment. In the short run, policy support and macro stability are expected to anchor growth amid global volatility."

*Weekly Average ** Dun and Bradstreet Forecasts
About Dun & Bradstreet:
Dun & Bradstreet, a leading global provider of business decisioning data and analytics, enables companies around the world to improve their business performance. Dun & Bradstreet's Data Cloud fuels solutions and delivers insights that empower customers to accelerate revenue, lower cost, mitigate risk and transform their businesses. Since 1841, companies of every size have relied on Dun & Bradstreet to help them manage risk and reveal opportunity. For more information on Dun & Bradstreet, please visit www.dnb.com.
Dun & Bradstreet Information Services India Private Limited is headquartered in Mumbai and provides clients with data-driven products and technology-driven platforms to help them take faster and more accurate decisions across finance, risk, compliance, information technology and marketing. Working towards Government of India's vision of creating an Atmanirbhar Bharat (Self-Reliant India) by supporting the Make in India initiative, Dun & Bradstreet India has a special focus on helping entrepreneurs enhance their visibility, increase their credibility, expand access to global markets, and identify potential customers & suppliers, while managing risk and opportunity.
India is also the home to Dun & Bradstreet Technology & Corporate Services LLP, which is the Global Capabilities Center (GCC) of Dun & Bradstreet supporting global technology delivery using cutting-edge technology. Located at Hyderabad, the GCC has a highly skilled workforce of over 500 employees, and focuses on enhanced productivity, economies of scale, consistent delivery processes and lower operating expenses.
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