MUMBAI, India, Feb. 26, 2024. It is the Economy Observer report by Dun & Bradstreet, a major worldwide provider of data for business decision-making and analytics, that offers projections of key economic indicators, along with analysis and insight into the latest economic developments.

Key economic forecasts:

Real Economy: The Real Economy Index of Industrial Production (IIP) is anticipated to show moderate growth in January 2024 due to factors such as slowing of demand after the holiday season, the business jitters ahead of elections, and the potential effect of a high-interest rate regime on small-scale companies. The slowdown in the manufacturing industry is a major concern. However, the substantial allocation of capital expenditures of the Union Budget for 2024-25 is anticipated to spur the pace of activity, particularly in the infrastructure and capital goods segment in the coming years. Dun & Bradstreet expects the IIP to have increased by 3.2 percent in January 2024.

Pricing Scenario: An increase in the global price of oil creates upward inflation pressure. In the US, there a lingering prices of food products like pulses as well as spices and vegetables, and frequent disruptions to the supply chain across the globe is likely to keep the retail inflation higher than the RBI's goal of 4 percent in the short long. Dun & Bradstreet expects the Consumer Price Inflation (CPI) to be 5.3 percent as well as Wholesale Price Inflation (WPI) to be in the range of 0.1 0.1% in February 2024.

Money and Finance: The projection of the government of a 5.8 percent fiscal deficit in FY24 compared with budgeted estimate of 5.9% and estimates of a 70-basis-point reduction in the fiscal deficit goal for FY25 is expected to help boost sentiment among investors. The supply of government bonds will remain low due to the less budgeted borrowings, but expectations are expected to be robust due to worldwide bond (index) inclusion, which will help the market for bonds going forward. Dun & Bradstreet anticipates the 10-year G-Sec yield to decrease to about 7.1 percent by February 20, 2024. In the 15-91 days Treasury Bills yield is predicted to grow to 7.0 percent, mostly due to the ongoing liquidity deficit.

External Sector: A variety of factors, including the narrowing of the trade deficit, rising stock market prices as well as the growth of reserves in forex, and a positive sentiment of investors in the wake of robust economic data will likely boost the rupee, which is likely to increase in February and March 2024. Dun & Bradstreet expects the rupee to rise to 83.0 per US dollar in February 2024. It will then increase to 82.7 per US USD in March 2024.