Page 4 - Policy Economic Report - September 2025

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

Executive Summary

According to the OECD in its latest economic outlook, global Gross Domestic Product (GDP) growth is
projected to slow from 3.3 percent in 2024 to 3.2 percent in 2025 and to 2.9 percent in 2026. According
to the OECD, the downward revision from its previous forecast is due to "front-loading ceasing and higher
tariff rates and still-high policy uncertainty" that dampen investment and trade. The report cautioned that
risks to the outlook remain elevated. Potential triggers for weaker growth include further tariff escalation,
renewed inflationary pressures, heightened fiscal concerns, and financial market instability.

For the United States, GDP growth is forecast to decline from 2.8 percent in 2024 to 1.8 percent in 2025,
and then to 1.5 percent in 2026, as strong investment in high-tech sectors is outweighed by the drag from
tariffs and lower net immigration. In the eurozone, GDP is projected to grow by 1.2 percent in 2025 and
1.0 percent in 2026. While easier credit conditions provide some support, trade frictions and geopolitical
uncertainty are expected to limit momentum. Growth in China is projected to be 4.9% in 2025 and 4.4%
in 2026, as front-loading unwinds, higher tariffs take effect and fiscal support fades.

In case of India, the National Statistics Office (NSO), Ministry of Statistics and Programme Implementation
(MoSPI) released the Quarterly Estimates of Gross Domestic Product (GDP) for the April-June Quarter (Q1)
of Financial Year (FY) 2025-26. The key highlights are as follows: -

• Real GDP has been estimated to grow by 7.8% in Q1 of FY 2025-26 over the growth rate
of 6.5% during Q1 of FY 2024-25.

• Nominal GDP has witnessed a growth rate of 8.8% in Q1 of FY 2025-26.

• Agriculture and Allied Sector has observed the Real GVA growth rate of 3.7%, as compared to the
growth rate of 1.5% registered in Q1 of last financial year.

• Secondary Sectors, prominently Manufacturing (7.7%) and Construction (7.6%) Sector has
registered above 7.5% growth rate at Constant Prices in this quarter.

• Tertiary Sector (9.3%) has recorded substantial growth rate at Constant Prices in Q1 of FY 2025-
26, over the growth rate of 6.8% in Q1 of FY 2024-25.

Year-on-year inflation rate based on All India Consumer Price Index (CPI) for the month of August, 2025
over August, 2024 is 2.07% (Provisional). There is an increase of 46 basis points in headline inflation of
August, 2025 in comparison to July, 2025.

Year-on-year inflation rate based on All India Consumer Food Price Index (CFPI) for the month of August,
2025 over August, 2024 is -0.69% (Provisional). Corresponding inflation rates for rural and urban are -
0.70% and -0.58%, respectively. An increase in headline inflation and food inflation during the month of
August, 2025 is mainly attributed to increase in inflation of Vegetables, Meat and fish, Oil and fats,
Personal care and affects, Egg etc.

September 2025 Page | 3