Page 4 - Policy Economic Report - August 2025

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

Executive Summary

According to IMF, global real GDP grew by 0.7 percent quarter-on-quarter in 2025Q1 following growth of
1.0 percent in the previous quarter, with slowdowns in all major geographic regions. The rate was close
to the pre-pandemic average (from 2012Q1) of 0.8 percent.

Asia continued to provide the main impetus, increasing by 1.1 percent and contributing 0.6 percentage
points to global growth. Europe also saw more muted gains than in the previous quarter, contributing 0.1
percentage points to World growth. Expansion in the Americas slowed to 0.2 percent with the region
making only a marginal contribution to overall growth. Africa grew by 0.7 percent, while in Oceania, GDP
grew by 0.3 percent, with each region also making marginal positive contributions.

As far as India is concerned, according to Ministry of Statistics and Programme Implementation (MoSPI),
India’s real GDP which measures the output of economy after removing effect of inflation expanded by
6.5% in 2024-25. The Reserve Bank of India expects this pace to continue into 2025–26.

India’s economy shows robust expansion, with real GDP for FY25 estimated at Rs. 1,87,97,000 crore
(US$ 2.20 trillion), from Rs. 1,76,51,000 crore (US$ 2.06 trillion) in FY24 with a growth rate of 6.5%. By
2030, India is set to become the world’s third-largest economy with a projected GDP of $7.3 trillion.

The combined Index of Eight Core Industries (ICI) increased by 2.0 per cent (provisional) in July, 2025 as
compared to the Index in July, 2024. The production of Steel, Cement, Fertilizer and Electricity recorded
growth in July, 2025. The ICI measures the combined and individual performance of production of eight
core industries viz. Coal, Crude Oil, Natural Gas, Refinery Products, Fertilizers, Steel, Cement and
Electricity. The Eight Core Industries comprise 40.27 percent of the weight of items included in the Index
of Industrial Production (IIP). The final growth rate of Index of Eight Core Industries for June 2025 was
observed at 2.2 per cent. The cumulative growth rate of ICI during April to July, 2025-26 is 1.6 per cent
(provisional) as compared to the corresponding period of last year.

In case of Headline inflation-: Year-on-year inflation rate based on All India Consumer Price Index (CPI) for
the month of July, 2025 over July, 2024 is 1.55% (Provisional). There is decline of 55 basis points in headline
inflation of July, 2025 in comparison to June, 2025. It is the lowest year-on-year inflation rate after June,
2017.

Food Inflation: Year-on-year inflation rate based on All India Consumer Food Price Index (CFPI) for the
month of July, 2025 over July, 2024 is -1.76% (Provisional). Corresponding inflation rates for rural and
urban are -1.74% and -1.90%, respectively.

The significant decline in headline inflation and food inflation during the month of July, 2025 is mainly
attributed to favourable base effect and to decline in inflation of Pulses and Products, Transport and
communication, Vegetables, Cereal and products, Education, Egg and Sugar and confectionery.

On the external front, India's forex reserves surged by $1.48 billion to $695.10 billion for the week ending
August 15, according to the data released by Reserve Bank of India. For the week ending on August 15,
foreign currency assets, a major component of the reserves, increased $1.92 billion to $585.90 billion.

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