Industrial Growth Hits 4-Month High In July, But Business Inflation Expectations Also Rise

The percentage of firms reporting ‘about normal’ profit expectations in July has increased to 31 per cent from 28 per cent reported in June survey.

The survey primarily of manufacturing firms on cost, sales, and profit outlook showed that inflation expectations may have stabilised, with the 12-month average remaining at 4.19 per cent.

Source : ABPLIVE AI

Business inflation expectations in India for the next year have increased in July, with firms anticipating a cost rise of 4.17 per cent, up 20 basis points from June's 3.97 per cent, a report said on Monday.

The survey, namely Business Inflation Expectations Survey (BIES) done by IIM Ahmedabad measured "one year ahead business inflation expectation, as estimated from the mean of individual probability distribution of unit cost increase," said in its statement.

The percentage of firms reporting ‘about normal’ profit expectations in July has increased to 31 per cent from 28 per cent reported in June survey.

The survey primarily of manufacturing firms on cost, sales, and profit outlook showed that inflation expectations may have stabilised, with the 12-month average remaining at 4.19 per cent.

"The uncertainty of business inflation expectations in July, as captured by the square root of the average variance of the individual probability distribution of unit cost increase, has increased to 1.94 per cent from 1.86 per cent reported in June," the statement read.

It seems firms’ inflation expectation has bottomed out, the report noted.

In July, 26 per cent of firms reported a moderate increase in costs of 3.1 to 6 per cent, up from 22 per cent in June. Overall, the cost perceptions data in July indicate moderate increase in cost pressures.

Over 60 per cent of respondents reported ‘somewhat less than normal’ or lower profit expectations during June-July 2025, the statement read.

In July, the percentage of firms reporting “about normal” sales increased to 26 per cent, up from 24 per cent in June. BIES is a monthly survey aimed at assessing inflation expectations of businesses and complements other macro data required for policy making. The majority of the responses of this round were received during the second half of August 2025, the report noted.

Analysts have said that the GST rate cuts on capital goods and industrial inputs will bring down manufacturing costs.

India's industrial growth, based on the Index of Industrial Production (IIP), rose to a four-month high of 3.5 per cent in July, driven by a strong performance in the manufacturing sector, according to latest data from the government. The industrial growth rate has accelerated in July from 1.5 per cent in June.

(This report has been published as part of the auto-generated syndicate wire feed. Apart from the headline, no editing has been done in the copy by ABP Live.)

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