Home / Newsroom / DOMESTIC GROWTH CONCERNS ACCENTUATED - Dun & Bradstreet India


Economy Observer is a monthly report which provides in-depth analysis on key macroeconomic developments in India and monthly forecast of key economic indicators.

Mumbai, December 27th, 2022

Key economic forecast:

Real Economy: Dun & Bradstreet expects industrial production to remain subdued as demand is expected to moderate from the levels witnessed during the first half of the fiscal year. While a slowdown in global trade is expected to hurt export demand, domestic consumers will become more cautious as global recession fears loom and financial tightening raises debt burdens of both households and corporates. Further, worries over layoffs and uncertainty over inflation trajectory will likely postpone consumption decisions. Dun & Bradstreet expects the Index of Industrial Production (IIP) to have grown by 1.3% -1.7% during November 2022.

Price Scenario: Although both wholesale and retail inflation eased to 21 month and 12 months lows respectively in the month of November, uncertainty prevails over the inflation trajectory. The respite in the inflation data came from the fall in fruit and vegetable inflation, as these products are cheaper during the winter months.  We expect headline retail inflation to remain higher and ease by early FY24 as energy prices remain elevated and geopolitical risks keep prices of essential commodities higher. As the gap between wholesale the retail inflation narrows, the magnitude of pass-through from wholesale to retail inflation in the coming months will be lower. Dun & Bradstreet expects Consumer Price Inflation (CPI) to be in the range of 6.0% - 6.2% and Wholesale Price Inflation (WPI) to be around 6.0% - 6.2% in December 2022.

Money & Finance: Dun & Bradstreet expects yields to remain elevated across the curve. The US Fed’s hawkish tone and plans for continued tightening next year as per its December 2022 meeting will keep investor concerns elevated and have added to the rate hike expectations by the Central Banks of emerging markets including India. In India, despite the latest policy rate hike by 35 basis points, the real interest rates remain below the Reserve Bank of India’s estimated natural rate of interest i.e. between 0.8% and 1%. This suggests that there is scope for a further rate hike. Dun & Bradstreet therefore expects the 15-91-day Treasury Bills yield average at around 6.40% -6.45% and 10-year G-Sec yield at around 7.30%-7.35% during December 2022.

External Sector: As fears of recession keep the dollar elevated, trade deficit widens and the rising real effective exchange rate (REER) points to an overvalued rupee, the rupee will continue to depreciate.  Although the return of FPIs to the equity market (net investment in equity market in November) bodes well for the rupee, the support might be temporary. Dun & Bradstreet expects the rupee to be at around 82.4 per US$ during December 2022.

Dr. Arun Singh, Global Chief Economist, Dun & Bradstreet said “Domestic growth concerns have been accentuated as recession fears loom, global trade slows down and geo-political risk remains elevated. As consumers and corporates turn cautious over global economic prospects, financial tightening raises debt burdens of both households and corporates. As profitability deteriorates, demand is expected to be moderate going ahead. Moreover, there will be pockets of distress especially from the export-oriented sectors. Depreciation in the rupee, imported inflationary pressures and widening of current account deficit amidst volatile foreign investment inflows will subdue growth in FY24 as well”.

Dun & Bradstreet’s Economy Observer Forecast



Latest Period

Previous period

IIP Growth

1.3% - 1.7% Nov-22

-4.0% Oct-22

3.1% Sep-22

Inflation WPI

6.00% - 6.20% Dec-22

5.85% Nov-22

8.39% Oct-22

CPI (Combined)

6.00% - 6.20% Dec-22

5.68% Nov-22

6.50% Oct-22

Exchange Rate (INR/US$)

82.40 - Dec-22

81.81 Nov-22

82.34 Oct-22

15-91 day's T-Bills

6.40% - 6.45% Dec-22

6.46% Nov-22

6.29% Oct-22

10 year G-Sec yield

7.30% - 7.35% Dec-22

7.36% Nov-22

7.46% Oct-22

Bank Credit

12.00% - 12.30% Dec-22

15.61% Nov-22

16.7% Oct-22









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