Weekly Economic Outlook: August 11-August 17, 2025
- Remin Francis I R
- Aug 18
- 2 min read
India’s inflation story continues to be quite remarkable. In the latest update, annual consumer price inflation dropped to just 1.55%, well below market expectations of 1.76% and nearing historical lows. Food prices led the decline, with vegetable costs plunging sharply, while transport and communication inflation moderated. Housing costs remained relatively steady. Wholesale prices also softened, falling 0.58% year-on-year, driven by steep declines in food (-2.15%) and fuel (-2.43%). Manufacturing prices, however, saw a modest acceleration to 2.05% YoY, marking the fastest growth in three months. On the trade front, India’s merchandise trade deficit widened to $27.35 billion in July, as imports outpaced exports at $64.59 billion versus $37.24 billion. In the auto sector, passenger vehicle sales rebounded 1.5% YoY to a four-month high of 301,251 units, signalling optimism ahead of the festive season.
Across the oceans, the Reserve Bank of Australia cut its cash rate by 25 basis points to 3.6%, bringing borrowing costs to their lowest since April 2023. This is the third cut this year, reflecting a slowing inflation trend and a softer labour market. While households may benefit from lower rates, the RBA remains cautious amid global uncertainties, trade risks, and mixed demand in some sectors. The UK’s unemployment rate stayed at 4.7% in the three months to June, the highest since mid-2021, with long-term unemployment on the rise. Yet overall employment grew by 238,000 to 34.21 million, driven mainly by full-time jobs. Economic growth for Q2 was 1.2% YoY, slightly down from Q1 but ahead of expectations, powered by household spending, government expenditure, and exports. Quarterly growth slowed to 0.3%, reflecting weaker business investment but gains in services and construction. In the US, inflation held steady at 2.7% in July, with core inflation rising to 3.1%, its highest in five months. Monthly CPI rose 0.2%, led by shelter, transportation, and medical care costs. Meanwhile, consumer sentiment fell to 58.6 in August, as inflation concerns and tougher buying conditions for durable goods weighed on confidence. China’s industrial production expanded 5.7% YoY in July, slowing from June’s 6.8%, as unusually high temperatures and heavy rainfall affected capacity. Manufacturing growth eased to 6.2%, while electricity, gas, and water output picked up. Automotive, communications, and shipbuilding led the gains, keeping overall industrial momentum positive despite weather-related challenges.
Want to read more?
Subscribe to finsightsbysquareleague.com to keep reading this exclusive post.
