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Geopolitical Conflicts Jeopardize Economic Gains

Mumbai, November 1, 2023

Key economic forecast:

Real Economy: 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 pose risk to global economic activity, potentially stalling the growth momentum seen in industrial activities. Dun & Bradstreet expects the Index of Industrial Production (IIP) to have grown by 9.0% during September 2023.

Price Scenario: Worries about price pressure persist, especially due to geopolitical conflicts that could keep crude oil prices elevated. The instability in the Middle East introduces an element of uncertainty to the global commodity prices. The “fuel and light” category, which saw deflation in September, is anticipated to witness a minor upturn. Furthermore, inflation in cereals and pulses remains stubbornly high, while vegetable prices have begun to stabilize. Dun & Bradstreet expects the Consumer Price Inflation (CPI) to be 4.7% and WPI to be around (-)0.5% for October 2023.

Money & Finance: Dun and Bradstreet expects that bond yields will stay elevated as the Central Bank is set to sell bonds to keep liquidity tight.  Besides, inflation will remain elevated due to the volatility in global energy and food prices. Weakness of the Indian rupee coupled with a surge in US bond yields appear to have instigated a shift in foreign investments towards US debt market which could keep yields under pressure. Dun & Bradstreet expects the 15-91-day Treasury Bills yield at 6.9% and 10-year G-Sec yield to be 7.3% for October 2023.

External Sector: Rupee will witness minimal relief as 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. Dun & Bradstreet expects the rupee to remain at 83.3 per US$ in October 2023 and 83.4 per US$ in November 2023.

Dr Arun Singh, Global Chief Economist, Dun & 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. These developments are crucial as the current global uncertainties due to escalation of the Hamas-Israel conflict could potentially impact economic activity worldwide, including India".

Dun & Bradstreet’s Economy Observer Forecast



Latest Period

Previous period

IIP Growth

9.0% September-23

10.3% August-23

6.0% July-23

WPI Inflation

(-)0.5% October-23

(-)0.26% September-23

 (-)0.52% August-23

CPI (Combined) Inflation


5.02% September-23

6.83% August-23

Exchange Rate (INR/US$)

83.4 November-23

83.3 October-23 (est.)

83.03 September-23

15-91 day's T-Bills

6.9% October-23

6.6% September-23

6.49% August-23

10-year G-Sec yield

7.3% October-23

7.17% September-23

7.2% August-23

Bank Credit

19.2% October-23

20.0% September-23

19.8% August-23




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