Global and Domestic Economic Outlook Analysis

This technical report provides an analysis of the global and domestic economic outlook as of August 2025. It begins by discussing the US economy, highlighting the potential risks of stagflation due to President Trump's new tariffs, which have raised the average tariff rate to its highest since 1934. The report then examines the UK economy, noting a rebound in the services sector, while manufacturing faces challenges from US tariffs. The Chinese economy is also analyzed, with factory output growth hitting an eight-month low, prompting calls for stimulus. The domestic outlook for India reveals a widening trade deficit, negative wholesale price index inflation, and significant GST reforms aimed at stimulating growth. The report also discusses the impact of US tariffs on Indian goods, the rise in farm and processed food exports, and India's improving economic indicators. Additionally, it covers the interest rate outlook, noting rising sovereign bond yields and their implications for government borrowing and private investment.