RBI has helped stabilize the currency
Dun & Bradstreet has revised its Indian GDP growth forecast for 2025-26 to 6.3% from 6.8%, reflecting rising global uncertainties and external headwinds such as US tariff pressures and ongoing trade tensions that continue to weigh on exports and private investment.
However, the Reserve Bank of India’s shift in policy stance to ‘accommodative’, coupled with the potential for further rate cuts, signals a proactive effort to stimulate domestic demand https://www.commerce.gov.in/.
At the same time, domestic factors, liquidity conditions, and some positive performing sectors as reflected in the recent Index of Industrial Production (IIP) data are expected to offer partial support. In this context, Dun & Bradstreet projects a moderate improvement in the IIP to 3.2% in April from 3.0% in March, despite ongoing weakness in manufacturing and mining.
Price Scenario: In April 2025, India’s inflation outlook remains favorable, with both retail and wholesale price pressures expected to ease. Dun & Bradstreet forecasts CPI inflation to moderate to 2.8% in April down from 3.3% in March, supported by steady rural consumption driven by welfare measures, that have bolstered agricultural output and rural demand https://www.investindia.gov.in/.
On the wholesale front, WPI inflation is projected to decline to 1.3% in April, from 2.0% in March, reflecting muted input cost pressures and soft global commodity prices, despite recent volatility in metal markets. While copper prices have surged and other base metals exhibit mixed trends, these are expected to have a more pronounced impact on future inflation and industrial cost structures rather than immediate wholesale price inflation https://www.bseindia.com/.
Overall, the inflation trajectory appears benign in the near term, underpinned by supportive domestic factors and a stable supply outlook https://www.nseindia.com/.
Money & Finance: India’s financial markets in April 2025 reflect a softening interest rate environment, supported by easing inflation, stable borrowing costs, and cautious credit dynamics. Dun & Bradstreet’s forecast of the 10-year G-Sec yield moderating to 6.7%, 91-day T-Bill yield holding at 6.5%, and bank credit growth rising to 11.5% in April from 11% in March is driven by the RBI’s continued monetary easing—marked by a second consecutive 25 bps repo rate cut to 6.00%—and improving macroeconomic stability. Despite the current liquidity deficit, as evidenced by the muted response to the Rs.1.5 trillion VRR auction, which attracted only Rs.25,431 crore in bids. The RBI’s Rs.40,000 crore OMO purchase further supports liquidity, reinforcing expectations of a gradual recovery in credit and investment activity.
External Sector: In March 2025, the INR/USD exchange rate strengthened to 86.6, Dun & Bradstreet’sforecasts pointing to further appreciation to 85.8 in April and 85.2 by May, supported by easing global inflation and reduced capital outflows https://sbi.com.in/.
The Reserve Bank of India’s strategic interventions have helped stabilize the currency despite global financial market volatility and speculation in currency markets. A narrower trade deficit of US$12.5 billion in April, due to lower non-essential imports, along with Rs.14,670 crore in net FII inflows, has further improved the balance of payments and reinforced investor confidence, strengthening the rupee.
Arun Singh, Global Chief Economist, Dun & Bradstreet, said, “India’s macroeconomic near-term outlook signals cautious optimism, with the RBI steering a delicate balance between growth and macroeconomic stability.
“Prospects for the manufacturing sector appear strong, with expectations of a shift in demand from US firms moving away from China toward India. Inflation is low because of weak commodity prices, allowing the RBI to cut the repo rate again in April.
“This will further boost domestic demand, which is already supported by steady rural consumption. India’s recovery will hinge on sustained policy support and the stabilization of the global economic landscape. The path forward, while not without risks, is marked by underlying structural strength and policy agility.” Fiinews.com
