Dun and Bradstreet (D&B) in its economy observer report has predicted that the festive season, spanning from August to November will boost consumer spending. Coupled with public sector spending, this is poised to stimulate industrial activity.
Nonetheless, the presence of geopolitical conflicts poses a risk to global economic activity, potentially stalling the growth momentum seen in industrial activities.
Dun and Bradstreet expects the Index of Industrial Production (IIP) to have grown by 9.0 per cent during September 2023.
Talking about the money, finance and external sector, the report added that the rupee will witness minimal relief as the Federal Reserve is expected to maintain higher rates of interest for a longer period. The combination of elevated US Treasury yields, high crude prices and the strength of the US dollar is likely to exert pressure on the rupee’s strength.
Additionally, the persistence of elevated headline inflation, although it moderated to a three-month low in September, contributes to downward pressure on the rupee. The Central Bank is expected to continue to intervene to stabilize the volatility of the rupee.
D&B expects the rupee to remain at 83.3 per USD in October 2023 and 83.4 per USD in November 2023.
Arun Singh, Global Chief Economist, Dun and Bradstreet said, “The Indian economy is gaining momentum driven by private consumption and investments. The completion of dedicated freight corridors to significantly reduce transit duration and freight costs is spurring the establishment of new industrial hubs and attracting foreign investments.”
Singh added that these developments are crucial as the current global uncertainties due to the escalation of the Hamas-Israel conflict could potentially impact economic activity worldwide, including India.
