Weekly Economic Outlook: October 20 - October 26, 2025
- Remin Francis I R
- Oct 27
- 2 min read
As we head into October, the global economy is showing a mix of strength and challenges, with inflation still a concern and growth in key areas moving at different paces.
India’s infrastructure output grew by 3% year-on-year in September 2025, a sharp slowdown from the 6.5% growth in August, which had been the highest in over a year. This drop was largely driven by weak performance in key sectors like coal (-1.2%), crude oil (-1.3%), and natural gas (-3.8%), with the ongoing pressure from the US on India to reduce its intake of Russian energy commodities impacting both domestic consumption and export demand for refineries. Meanwhile, construction-related sectors showed more resilience, with cement production remaining nearly flat at 5.3% and steel output picking up pace to 14.1%.
India’s HSBC Composite PMI fell to 59.9 in October, from 61.0 in September, signalling a slowdown in the pace of economic growth. New orders, especially from foreign markets, showed weaker growth, and employment expansion also slowed. However, the Manufacturing PMI rose to 58.4, indicating sustained strength in production, despite favourable demand from international markets and some external challenges, such as US tariffs. On the services side, the PMI dropped to 58.8, marking a slower expansion due to increased competition and recent disruptions from weather conditions.
India’s Foreign Exchange Reserves showed a modest increase, rising to USD 702.28 billion on October 17, up from USD 697.78 billion the previous week. The reserves have remained robust, although they are still below the September 2024 peak of USD 704.89 billion.
Canada’s inflation ticked up to 2.4% in September, the highest since February 2025, driven mainly by higher food prices (especially vegetables and sugar) and rising transportation costs. While gasoline prices continued to decline, the overall price increase surpassed market expectations. In the UK, inflation remained steady at 3.8%, but with notable price hikes in transportation and restaurants. On the flip side, food inflation showed some signs of easing. In the US, inflation rose slightly to 3% in September, driven by energy prices, particularly fuel oil and gasoline. Despite the uptick, core inflation slowed to 3%, offering a hint of stability.
The UK saw a steady inflation rate of 3.8% in September, with transportation and food prices contributing the most to the increase. However, food inflation showed signs of moderation, with discounting helping ease price hikes. Meanwhile, Japan’s inflation edged up to 2.9% in September from 2.7% in August, largely due to rising energy costs. Food prices, however, showed some relief, particularly in rice, where price increases softened.
Overall, while there are some signs of slowing growth, particularly in energy-related sectors and international trade, India’s manufacturing and construction sectors are holding steady. Global inflationary pressures remain a concern, but core inflation in many countries is showing signs of stabilising.
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