Weekly Economic Outlook: August 25-31, 2025
- Remin Francis I R
- 2 days ago
- 2 min read
The last week of August brought a mix of encouraging numbers and global signals that investors and businesses will be watching closely. Let’s break it down.
India’s economy continued to show resilience. Industrial production grew by 3.5% in July 2025, a sharp rise from June’s 1.5% and well above market expectations of 2.1%. Manufacturing was the star performer, expanding 5.4%, while electricity output returned to growth at 0.6%. Mining, though still contracting at -7.2%, did so at a slower pace than the month before.
The bigger headline was GDP growth. India’s economy expanded 7.8% year-on-year in Q2 FY26, the fastest pace in five quarters and stronger than the expected 6.6%. Private consumption grew 7%, government spending rose 7.4%, and investments climbed 7.8%. Imports, however, surged 10.9%, outpacing export growth of 6.3%, reflecting tariff pressures and global uncertainties.
On the external side, foreign exchange reserves dipped to $690.7 billion, slightly lower than the previous week but still among the highest in India’s history.
In the US, second estimates confirmed a strong rebound. GDP grew 3.3% in Q2 2025, revised up from 3%. The improvement was led by stronger consumer spending (1.6%) and investment (5.7%), though exports fell -1.3%.
Japan also saw a brighter tone, with its consumer confidence index rising to 34.9 in August, the best since January. Optimism improved across all key components, including income expectations and employment outlook.
Meanwhile, China’s manufacturing PMI edged up to 49.4 in August, still below the 50 mark but showing signs of stability. Output rose at the fastest pace since March, helped by an extended tariff truce with the US, though new orders and export sales remained weak.
The last week of August showed India’s economy firing on multiple cylinders, backed by strong domestic demand and resilient manufacturing. Global cues remain mixed, positive momentum in the US and Japan contrasts with continued softness in China. For India, the coming months will be about balancing domestic growth with external trade pressures.
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