Weekly Economic Outlook: August 18-24, 2025
- Remin Francis I R
- Aug 25
- 2 min read
India’s economy sent out a mixed set of strong signals last week, although global trends reminded us of the challenges ahead.
Starting with jobs, India’s unemployment rate dropped sharply to 5.2% in July, down from 5.6% in June, the lowest level since April, when it stood at 5.1%. That shows the broad strength in the economy, even as the U.S. tariff hike looms over key industries. Interestingly, unemployment among men stood slightly higher at 5.3%, while women recorded 5.2%. The concern, however, remains youth unemployment, which stayed elevated at 14.9%.
On the growth side, infrastructure output rose 2% year-on-year in July, marking the 11th straight month of expansion. Steel (12.8%) and cement (11.7%) stood out with double-digit growth, pointing to strong construction activity. Electricity and fertilisers also bounced back, though refinery output slipped (-1%), reflecting pressure from global trade tensions.
Business activity was on fire, literally at record highs. The HSBC India Composite PMI hit 65.2 in August, the highest ever, driven by robust growth in services and manufacturing. Services PMI surged to 65.6, while manufacturing climbed to 59.8, its best since January 2008. Demand, both domestic and overseas, is powering this surge, though rising input costs have pushed companies to raise prices at the steepest pace since 2013.
Globally, inflation trends were mixed. Canada’s inflation eased to 1.7%, helped by falling gasoline costs, while the UK saw inflation jump to 3.8%, driven by higher travel and hotel costs during the summer holidays. In Asia, Japan’s inflation slowed to 3.1%, its lowest in eight months, though food prices, especially rice, surged nearly 91%.
Meanwhile, India’s external position remained solid, with foreign exchange reserves climbing to USD 695.1 billion as of mid-August, not far from last year’s record highs.
All in all, India continues to show resilience, with strong momentum in jobs, demand, and infrastructure, even as global inflation and trade tensions keep the outlook nuanced.
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