Weekly Economic Outlook: December 1 - December 7, 2025
- Remin Francis I R
- 5 days ago
- 2 min read
Last week’s economic picture offered a mix of steady momentum and a few signs of cooling, both in India and across global markets.
India’s manufacturing sector lost a bit of steam in November, with the HSBC Manufacturing PMI easing to 56.6 from the earlier estimate of 57.4 and sharply lower than October’s 59.2. It’s still comfortably above the long-run average of 54.2, but the slowdown reflected softer new orders and the weakest output growth since February. Export orders also rose at their slowest pace in over a year, and employment growth slipped to its softest level in nearly two years. On the brighter side, input cost and output price inflation moderated, offering some relief to producers.
Industrial activity, too, was subdued. IIP grew just 0.4% year-on-year in October, well below expectations, compared to a revised 4.6% in September. Extended rains pulled electricity output down 6.9%, while mining contracted 1.8%. Manufacturing did a bit better with 1.8% growth, though this was still the smallest rise since August 2024. Festival-related holidays also meant fewer working days, according to MOSPI.
Meanwhile, the services sector held firm. The HSBC Services PMI improved to 59.8, supported by strong new orders. The composite PMI, however, edged down to 59.7, reflecting softer factory activity. Input cost pressures eased across both manufacturing and services.
The RBI delivered its widely expected 25 bps rate cut, bringing the repo rate to 5.25%, the lowest since July 2022. With a total 125 bps cut this year, the central bank also upgraded GDP growth for FY26 to 7.3% and revised inflation down to 2.0%. Bond markets may stay supported with INR 1 trillion of OMO purchases and USD 5 billion in forex swaps planned for December.
Globally, the picture was mixed. The US ISM Manufacturing PMI slipped to 48.2, signalling deeper contraction, while the ISM Services PMI rose to 52.6, its strongest in nine months. In Europe, inflation inched up to 2.2%, driven by services. Canada’s job market surprised on the upside, with unemployment falling to 6.5%. In the US, consumer sentiment improved slightly to 53.3, helped by better expectations and easing inflation fears.
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