Category: Money Trends

Macro Pulse – A Balancing Act Between India’s Economic Growth and Stability

September 2025 brought a sense of measured calm to global markets, even as growth divergence deepened across major economies. The U.S. economy expanded ~2.9%, China struggled near 2%, and the Eurozone steadied at 2%. India, meanwhile, continued to chart its own trajectory – supported by robust consumption, improved fiscal metrics, and a disciplined monetary stance.

The contrast between developed and emerging markets grew sharper: while the U.S. Federal Reserve signaled that its tightening cycle may soon pause, China’s policymakers leaned toward renewed stimulus to counter deflationary pressures. India stood comfortably in the middle, balancing inflation control with growth momentum.

Money Trends – August 2025

RBI Policy – Holding Steady as Inflation Eases

The Reserve Bank of India maintained the repo rate at 5.50%, reverse repo at 3.35%, and bank rate at 5.75%. The stance remains “withdrawal of accommodation,” but the tone has softened as headline inflation remains close to the 4 % target.

Short-term money-market instruments reflected this comfort:

Instrument	Sep 2025 Rate (%)	1 Year Ago (%)	Trend
TREP (overnight)	5.47	6.69	Eased ↓
91-day T-Bill	5.40	6.34	Eased ↓
3-Month CD	5.87	7.31	Eased ↓
1-Year CP	6.40	7.22	Eased ↓

Abundant liquidity and moderating credit demand have helped short-term yields drift lower. The takeaway: the RBI is comfortable letting liquidity support the system as long as inflation expectations remain anchored.

Bond Markets – Yields Ease Across the Curve

Gilt yields fell up to 17 basis points (bps) across maturities, while corporate bond yields slipped 11 bps on average. The only outlier was the 1-year paper, which rose slightly by 9 bps amid seasonal liquidity adjustments.

The spread between corporate and government securities narrowed for 2- and 10-year segments, implying a gradual return of risk appetite among debt investors. For long-duration funds and sovereign bond allocations, this provided a modest tailwind in September.

Key takeaway: The bond market is signaling comfort with India’s macro framework and is quietly pricing in a mild rate cut in early 2026 if inflation continues to behave.

Global Snapshot – Inflation Paths Diverge

The global inflation map turned fragmented:

• U.S. CPI ~ 2.9 % – sticky but stable, keeping the Fed hawkish.
• U.K. ~ 3.8 % – moderating slowly from last year’s highs.
• Eurozone ~ 2 % – in line with ECB’s target.
• China (-0.4 %) – a return to deflation concerns.

This divergence is shaping FX and commodity flows. Emerging markets with positive real yields (like India and Brazil) remain attractive to global investors seeking carry returns.

India’s Real Yield Premium – A Global Bright Spot

India’s 10-year G-Sec yield stood at 6.57 %, while headline inflation averaged 2.07 %, translating to a real yield of 4.5 %, among the highest in the world
By comparison, the U.S. offered a real yield of 1.25 %, Germany 0.84 %, and Japan negative 1.05 %. This yield differential is not just a statistical curiosity, it’s a major reason why global allocators continue to view India as a favorable destination for both sovereign and corporate debt flows.

Country	10-yr Yield (%)	Inflation (%)	Real Yield (%)
Brazil	13.73	5.13	8.59
India	6.57	2.07	4.50
France	3.54	0.90	2.64
China	1.88	-0.40	2.28
U.S.	4.15	2.90	1.25
Germany	2.94	2.10	0.84
Japan	1.65	2.70	-1.05

Such real yields anchor the rupee and support foreign portfolio investment (FPI) inflows, even as global bond markets remain volatile.

Liquidity and Credit – Ample and Orderly

Liquidity conditions remained supportive with CRR at 3.75 % and SLR at 18 %. Corporate credit spreads widened marginally (2 – 12 bps), reflecting selective repricing rather than systemic tightness. Banks and NBFCs continued to focus on high-quality borrowers, keeping non-performing assets under control.

Mutual fund data showed steady flows into liquid and ultra-short-duration funds, underscoring the preference for safety and liquidity in the short end of the yield curve. Retail investors are also incrementally shifting toward debt funds as returns turn more predictable than last year’s volatile equity cycle.

Domestic Data to Watch – October 2025 Events

Indicator	Release Date
CPI Inflation (YoY, Sep)	13 Oct 2025
WPI Inflation & Manufacturing Data	14 Oct 2025
Passenger Vehicle Sales (YoY)	15 Oct 2025
Balance of Trade & Unemployment Rate	15 Oct 2025
Industrial Production (YoY)	28 Oct 2025
Government Budget Value	31 Oct 2025

On the global side, look out for the U.S. and U.K. inflation prints, China’s Loan Prime Rate decision (on 20 Oct), and Japan’s nationwide CPI (on 23 Oct). These events will shape global bond yields and currency flows heading into November.

Global Growth Matrix – Two Worlds, Two Speeds

While emerging markets like India and Brazil continue to expand above trend, developed markets are showing signs of slowing momentum. China’s recovery is patchy and credit-driven, Europe’s growth is constrained by energy costs, and the U.S. consumer remains resilient but debt-laden.

This two-speed world creates a fertile environment for active allocation strategies. For Indian investors with global fund exposure, the lesson is clear, diversify geographically but anchor in India’s structural growth story.

Sectoral Reflections – Debt Funds Back in Focus

With rates plateauing and yields softening, debt funds across short-duration and corporate bond categories are regaining popularity. Investors seeking stability and tax-efficiency are re-evaluating fixed-income allocations within multi-asset portfolios.

At Growthfiniti, the Efficient Frontier framework continues to recommend balanced exposure across duration and credit quality, ensuring that returns are risk-adjusted and aligned with individual goals. Institutional-grade processes like risk budgeting and factor-based selection help clients capture value even in moderate yield cycles.

Outlook – The Calm Before a Policy Shift

Looking ahead to Q4 FY25, the base case remains one of stability: moderate inflation, ample liquidity, and a steady rupee. However, a few variables bear watching, energy prices, global food inflation, and U.S. bond market volatility. Any surprise on these fronts could delay the RBI’s pivot toward easing.

For now, markets are pricing in a possible 25–50 bps cut by mid-2026, conditional on global central banks stabilizing. Until then, the policy narrative will likely emphasize data-dependence and gradualism, hallmarks of India’s macro prudence.

Investor Takeaway – Stay Positioned, Stay Patient

1. Maintain core debt allocations: Real yields remain favorable; duration offers a modest carry opportunity.
2. Balance across risk budgets: Use short-term funds for liquidity and longer-duration funds for potential capital gains.
3. Watch global triggers: U.S. rate decisions and China’s policy moves may influence flows into emerging markets.
4. Avoid speculative bets: This is a phase for steady compounding, not momentum chasing.

In short, India’s Economic Growth remains a bright spot in a world of crosscurrents, high real yields, stable policy, and resilient growth. For long-term allocators, staying invested through this phase could prove rewarding as the next interest-rate cycle turns favorable.

Introduction

The India Economy August 2025 showcased resilience and volatility in equal measure. Domestic growth remained strong, with GDP expanding 7.8% year-on-year and PMI readings hitting multi-year highs. Inflation dropped to a six-year low, giving policy makers breathing space. However, external shocks — particularly U.S. tariffs on Indian exports — weighed on equities and the rupee. This month’s Growthfiniti Newsletter presents a comprehensive breakdown of India’s macroeconomic performance, market trends, global dynamics, and asset class movements in India Economy August 2025.

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India Macroeconomic Indicators – India Economy August 2025

Industrial Growth and PMI Trends

In July 2025, India’s industrial production strengthened. The Index of Industrial Production (IIP) grew 3.5% YoY, compared to 1.5% in June.

• Manufacturing: +5.4%
• Electricity: +0.6%
• Mining: -7.2%

Business activity indicators reinforced the momentum.

• Manufacturing PMI: 59.3 in August 2025, the fastest improvement in 17.5 years, driven by strong demand and supply alignment.
• Services PMI: 62.9, a 15-year high, supported by robust new orders.

These data points reflect a healthy India Economy August 2025, with both manufacturing and services firing together.

Inflation Hits a 6-Year Low

• CPI Inflation: 1.55% YoY in July 2025, down from 2.1% in June — the lowest since June 2017 and below RBI’s 2% floor.
• WPI Inflation: -0.58% YoY in July.

This disinflationary trend positions the India Economy August 2025 uniquely: low prices support households, though policymakers will watch for risks of demand slowdown.

RBI Inflation Data

GDP Growth

India’s GDP expanded 7.8% YoY in Q1 FY26.

• Manufacturing: +7.7%
• Agriculture & allied: +3.7%

This strong growth confirms India as one of the world’s fastest-growing economies in August 2025.

Trade Balance and Current Account

• Merchandise trade deficit: $27.35 billion (July 2025) vs $24.77B last year.
• Exports: $37.24B (+7.29% YoY).
• Imports: $64.59B (+8.59% YoY).
• Current Account Deficit: $2.4B (0.2% of GDP) in Q1 FY26, lower than $8.6B last year.

Fiscal & Forex Reserves

• GST collections: ₹1.86 lakh crore (+6.5% YoY).
• Forex reserves: $690.72B (Aug 22, 2025), slightly down from $698.19B in July.

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Domestic Equity Market – India Economy August 2025

Market Overview

The India Economy August 2025 equity story was dominated by external shocks. The U.S. doubled tariffs on Indian exports to 50%, threatening manufacturing competitiveness. Renewed Russia-Ukraine tensions further hurt sentiment. Optimism around domestic GST reforms limited downside by raising hopes of boosted consumption and possible RBI rate cuts.

Sectoral Performance

• Nifty Realty: -4.6% (higher construction costs, weak earnings, RBI holding repo rates).
• Nifty Metal: -1.4% (exposure to U.S. tariffs).
• Top gainers: Auto and FMCG, supported by festive optimism (Onam) and speculation of GST cuts on vehicles (two-wheelers from 28% to 18%).
• Underperformers: Realty, Pharma, Energy.

Valuations

• Midcaps & Small caps: Above 3-year averages → expensive.
• Large caps: Below averages → relatively attractive.

For investors, the India Economy August 2025 highlights the need for selective equity allocation.

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Fixed Income Market – India Economy August 2025

Bond Yields and Policy Outlook

Bond yields rose as the RBI kept policy rates unchanged, opting to monitor prior cuts’ impact. Fiscal worries resurfaced after GST reforms raised expectations of higher debt issuance. Confidence improved after a global agency upgraded India’s sovereign rating from BBB- to BBB.

Yield Movements

• G-Sec yields: +3 to 33 bps.
• Corporate bond yields: +7 to 13 bps.
• Spreads: Narrowed by 3–21 bps, except 1-year widened by 3 bps.

Fixed income investors in India Economy August 2025 saw both risks and opportunities, particularly in long-dated gilts.

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FII, Mutual Fund & Retail Flows – India Economy August 2025

Foreign Institutional Investors (FIIs)

• Net equity outflows: ₹34,993 crore in August 2025.
• Turned net buyers in debt after 4 months of selling.

Mutual Funds

• Net equity buyers for 54 months (except Apr 2023 & Aug 2022).
• Debt: Net sellers for 16 consecutive months.

SIP Flows

Retail participation remained robust:

• Monthly SIP contribution: ₹28,464 crore in July 2025 (record high).
• SIP AUM: ₹15.19 lakh crore (vs ₹15.31 lakh crore in June).
• Outstanding SIP accounts: 944.97 lakh.

The India Economy August 2025 underscores how retail flows are strengthening long-term market depth.

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Global Macroeconomic Indicators – India Economy August 2025

Growth & Inflation Highlights

• U.S. CPI: +0.2% in July; annual inflation steady at 2.7%; core CPI +0.3%.
• U.K. GDP: +0.4% in June (after -0.1% in May).
• U.S. Manufacturing PMI: 53.0 in August, best since May 2022.
• China PMI: 50.5 in August, beating consensus 49.5.

Equity Markets

• Emerging markets: China led gains; India & Korea lagged.
• Developed markets: Japan rose most; Germany & France slipped.
• U.S. markets: Boosted by softer inflation, Fed Chair’s Jackson Hole speech hinting at cuts.

Fixed Income

• U.S. 10-year Treasury yield: Down 13 bps to 4.23%.
• Real returns: Positive in 10 economies, with Brazil, India, and the U.K. on top.

These global signals shaped investor sentiment in India Economy August 2025.

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Commodities & Currency – India Economy August 2025

Crude Oil

Brent crude fell on oversupply fears. OPEC+ confirmed a 547,000 bpd hike for September 2025, and U.S. inventories rose unexpectedly.

Precious Metals

• Gold: Rose on safe-haven demand and Fed rate cut expectations.
• Silver: Outperformed all asset classes in India Economy August 2025.

Rupee

The rupee depreciated against the U.S. dollar, pressured by FII outflows, tariff shocks, and global dollar strength. Optimism around GST reforms cushioned losses slightly.

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Asset Class Performance – India Economy August 2025

• Winners: Silver, followed by Gold.
• Losers: Crude Oil and Domestic Equities.

This asset rotation reflects risk aversion and safe-haven flows in India Economy August 2025.

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Global Market Calendar Year Performance

Key Takeaways – India Economy August 2025

• GDP growth surged to 7.8%; PMI hit multi-year highs.
• Inflation fell to a six-year low, below RBI’s tolerance band.
• Equities struggled due to U.S. tariffs and geopolitics.
• Fixed income gained strength from a sovereign rating upgrade.
• SIP inflows reached a record ₹28,464 crore, reflecting retail confidence.
• Globally, easing inflation boosted sentiment; precious metals outperformed commodities.

The India Economy August 2025 highlighted India’s economic strength, resilience in consumption, and the need for investors to balance equity risks with fixed income and global diversification.

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Growthfiniti Wealth Pvt. Ltd.
SEBI Registered Portfolio Manager (INP000009418) | AMFI Registered Distributor (ARN-168766) | APMI Registered PMS Distributor (APRN00443) | Associated Person with Motilal Oswal Financial Services Ltd.

Disclaimer: Investments are subject to market risks. Past performance is not indicative of future results.

Click to read Growthfiniti Wealth Money Trends July 2025 Report..

July 2025 Market Pulse: What Investors Need to Know

Money Trends July 2025 was a month of contrasts across global and domestic markets. While India’s macro indicators signaled resilience, equity markets came under pressure from tariff tensions and muted corporate earnings. At Growthfiniti, we believe staying informed about these shifts is essential for building enduring financial legacies. Understanding the Money Trends July 2025 can help investors navigate these challenges effectively.

India’s Economic Landscape: Resilience Amid Headwinds

• Growth and Output: India’s GDP grew 7.4% YoY in Q4 FY25 (MOSPI Data), with manufacturing moderating to 4.8% but agriculture and allied sectors accelerating to 5.4%.
• Industrial Production: IIP growth slowed to 1.5% in June from 1.9% in May.
• Inflation: Consumer inflation fell sharply to 2.1%, well below RBI’s 4% target (RBI Inflation Data), supported by easing food prices. Wholesale inflation also dipped into negative territory.
• External Balance: The current account swung into a surplus of $13.5 bn (1.3% of GDP), while the trade deficit narrowed on lower imports.
• Fiscal Position: Fiscal deficit stood at 17.9% of FY26 Budget Estimates in Q1, up from 8.4% a year earlier.

Investor Takeaway: Cooling inflation and strong GDP growth provide a supportive macro backdrop, but slowing industrial output and fiscal slippage call for cautious optimism.

Domestic Equities: Tariffs Weigh on Sentiment

Indian equity markets declined in July, with Nifty 50 down 2.9% as global trade tensions escalated and U.Indian equity markets declined in July, with Nifty 50 down 2.9% as global trade tensions escalated and U.S. tariffs on Indian goods loomed.

• Sector Winners: Pharma (+3.3%), Healthcare (+2.9%), and FMCG (+1.7%) benefited from defensive demand and export optimism.
• Sector Losers: IT (-9.4%), Realty (-7.5%), and PSU Banks (-4.9%) dragged indices lower, hit by weak earnings, layoffs, and trade concerns.

Valuations: Midcap and Smallcap indices remain expensive versus Large caps, trading well above 3-year averages.

Investor Takeaway: Defensive sectors continue to shine amid uncertainty, but valuations in mid- and small-caps warrant careful risk budgeting.

Fixed Income: Yields Edge Higher

Bond yields moved up as liquidity tightened and RBI struck a hawkish tone (RBI Monetary Policy), prioritizing forward-looking inflation control. The 10-year benchmark yield closed higher at 6.38%, aligning India among the world’s higher real-yield markets.

Additionally, the Money Trends July 2025 report highlights the importance of adapting investment strategies to current market conditions.

Investor Takeaway: Rising yields present opportunities in selective bonds, especially as inflation cools and carry remains attractive.

Flows & SIPs: Retail Investors Stay the Course

• FIIs: Net sellers in equities (₹17,741 cr outflow), reversing three months of inflows (SEBI Market Statistics).
• DIIs: Continued strong buying (₹60,939 cr inflow), supporting markets.
• SIPs: Monthly SIP contributions hit a record ₹27,269 cr, with AUM at ₹15.31 lakh cr—underscoring the resilience of retail investors (AMFI SIP Data).

Investor Takeaway: While global flows remain volatile, Indian households are showing remarkable discipline in systematic investing.

Considering the Money Trends July 2025 data, investors should assess their portfolios in light of the changing landscape.

The insights from Money Trends July 2025 suggest a watchful approach to fixed income investments.

Global Signals: A Divergent Recovery

• U.S. GDP rebounded 3.0% in Q2, retail sales and job data beat expectations (IMF Outlook), supporting equities.
• China grew 5.2% YoY, but manufacturing PMI slipped back into contraction, signaling export weakness.
• Europe & Japan saw modest growth, with central banks holding rates steady amid inflation moderation.

Global equity markets largely advanced, led by U.S. (+3.7%) and UK (+4.2%), while India and Brazil underperformed (World Bank Global Prospects).

In summary, the Money Trends July 2025 emphasize resilience and adaptability in investment approaches.

According to the Money Trends July 2025, market dynamics continue to evolve, requiring strategic responses.

Furthermore, the Money Trends July 2025 guide provides key insights into retail investor behavior.

Investor Takeaway: Global markets are navigating tariff risks with surprising resilience, but Asia remains vulnerable to trade frictions.

Commodities & Currency: Oil Climbs, Rupee Weakens

• Brent Crude rose 5.5% to $75/barrel on geopolitical tensions (MCX Commodity Data).
• Gold declined 2.5% as risk appetite improved, while silver gained 4.1%.
• INR depreciated against the dollar, pressured by equity outflows and rising oil prices.

Investor Takeaway: Rising crude prices and a weaker rupee could pressure India’s import bill and inflation trajectory.

Final Word: Process Over Noise

July underscored a simple truth—while headlines swing between tariffs, trade deals, and rate decisions, long-term wealth creation depends on process, not noise. At Growthfiniti, we anchor portfolios to the Growthfiniti Efficient Frontier (GEF), balancing risk and return across asset classes with discipline.

June’s Money Trends highlighted how shifting global trade tensions, cooling inflation, and resilient domestic demand continue to shape India’s investment landscape. The right portfolio positioning today can help you ride volatility while capturing long-term growth.

Therefore, reviewing the Money Trends July 2025 forecasts can aid in making informed investment decisions.

At Growthfiniti, we turn insights into action. If you’d like a personalized review of your portfolio based on June’s Money Trends, connect with us and discover how disciplined asset allocation can safeguard and grow your wealth.

Notably, the findings in Money Trends July 2025 reveal critical shifts in commodity prices.

In light of the Money Trends July 2025, external factors may influence domestic economic strategies.

Ultimately, the Money Trends July 2025 encapsulate the current market narrative and future opportunities.

Domestic equity markets declined amid ongoing uncertainty surrounding the U.S. President’s plans for reciprocal tariffs, raising concerns about a prolonged trade war and potential inflationary pressures. Investor sentiment was further dampened by the U.S. Federal Reserve’s statement that it is “not in a hurry to lower interest rates” and plans to “pause rate cuts to evaluate further progress in inflation.”

Domestic equity markets fell during the month on uncertainty over the U.S. trade policies under the new U.S. President’s regime.

The U.S. President gave a mixed set of signals, as he delayed tariff plans on Chinese goods but threatened to impose tariffs on Canada and Mexico. Losses were extended on concerns over a weakening rupee, rising crude oil prices and continued outflows by the foreign institutional investors from domestic equity markets.

However, losses were restricted as sentiment was boosted after the RBI announced several measures to inject over Rs. 1 lakh crore liquidity into the banking system. Investors reacted positively to the Economic Survey 2025 tabled in the Parliament on Jan 31, 2025, that pegged GDP growth between 6.3% to 6.8% for FY26.

The 2025-2026 Union Budget presents a comprehensive plan aimed at revitalizing the economy, empowering the middle class, and fostering inclusive growth. As stakeholders in India’s economic development, it is imperative that we align our strategies to leverage these opportunities and contribute to the nation’s progress.

India’s growth story remains intact, powered by structural reforms, expanding global competitiveness, and robust economic resilience. Explore key insights and strategies to navigate the year ahead.