9 FINANCEOUTLOOKINDIAJULY, 2025end-demand drove expansions in output, new orders, and job creation." To meet strong demand, particularly from international markets, as evidenced by the significant increase in new export orders, Indian manufacturing firms had to dig deeper into their inventories, causing the finished goods stock to continue shrinking. Finally, input prices fell while average selling prices increased as some manufacturers passed on higher costs to customers." Employment surges amid short-term hiringEmployment levels also rose in June. The survey noted that the month saw the highest rate of hiring in its history. This increase, however, was largely due to short-term hiring to meet rising workloads, as backlogs began to grow after stagnating in May.Industrial production falls to a nine-month low in AprilMeanwhile, India's industrial output increased by only 1.2 percent in May, the slowest pace in nine months, according to government data released on Monday. An early monsoon contributed to a 5.8% drop in electricity generation. This is the first contraction in nine months, and the steepest since June 2020. Mining output also fell by 0.1%, marking the second consecutive monthly decline.RBI cuts rate by 100 basis pointsDue to inflation falling within the central bank's comfort zone, the Reserve Bank of India (RBI) lowered the policy repo rate by 100 basis points, to 5.5 percent, between February and June. Because they anticipated lower EMIs on long-term loans, which would help homebuyers in particular, borrowers were relieved by the rate cut.The RBI's retail inflation forecast for the current fiscal year has been lowered from its April estimate of 4% to 3.7%.The central bank has kept its 2025­2026 GDP growth prediction at 6.5 percent. For April through June, the quarterly growth forecast is 2.9%; for July through September, it is 3.4%; for October through December, it is 3.9%; and for January through March, it is 4.4%.
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