Weekly Macroeconomic Analysis: 24 March 2025

Understand how global economic trends, macroeconomic policies, and trade uncertainties influence investments.

During the week of 24 March 2025, the Indian economy remained strong comparatively, but major economies like the US have declined. The main issue at the moment concerns tariffs, which affect the US economy and are the core reason for all economic issues. Further in this blog, let us have a look at the weekly macroeconomic analysis and key events.

Weekly Macroeconomic Analysis on Indian Economy Update

Throughout the week, analysing the financial market insights, FIIs remained strong net buyers for the second consecutive time, with a substantial amount of Rs. 17,425 crores. The major reason behind this was the attractive discounted valuations Indian markets had. Along with that, there was some development regarding the ongoing Russia-Ukraine war issue, which saw a ceasefire in the Black Sea, also contributed to the positive sentiment and the Nifty-50 index was up by 0.7%.

Strong Inflow of FII funds in Indian Markets

On Friday, the data for core sectors was released for February 2025, showing a decline to a five-month low of 2.9%, down from 5.1% in the previous month. The eight core sectors make a total of 40.3% of the index of industrial production. The major reason for the slowdown was a reduction in crude oil and natural gas production, and also a reduction in refinery-output growth. Further, let us have a look at the sector-wise performance: 

• Refinery: The production growth was reduced to 0.8%, down from 8.3%.
• Coal: The production growth was reported at 1.7%, compared to 4.6% in January.
• Natural Gas: The production fell by 6%, compared to a 1.5% fall in the previous month.
• Electricity: The generation was reported at 2.8%, up from 2.4%.
• Crude Oil: The output reduced by 5.2%, which fell again from January’s 1.1% decline.
• Steel: The output increased 5.6%, rising from 4.7% in the previous month.
• Fertilizer: The production increased by 10.2%, higher than January’s 3% growth.
• Cement: The output grew 10.5%, which was slow as compared to the 14.6% growth which was seen before.

Moreover, India used to buy Venezuelan oil, but on Monday, Trump imposed sanctions on it. Now, any country purchasing oil from Venezuela will have to pay a 25% duty to the U.S., apart from the previous tariff. This can impact India negatively. This new tariff will be implemented from 2 April 2025. However, after a three-year gap, India resumed buying oil from Venezuela in December 2023, importing around 65,000 and 93,000 barrels daily in January and February.

U.S. Economy Update

On Wednesday, U.S. President Donald Trump, again announced a 25% tariff on automobile imports. The main aim behind this strategy is to raise $100 billion in tax revenues and boost U.S. domestic manufacturing. This may be beneficial for the U.S. economy, however, other economies like India, China, and Japan may face a negative impact due to this decision.

On Wednesday, the U.S. GDP numbers for Q4 2024 (October to December) were released. As per the data, the U.S. GDP grew by 2.4% for the quarter. Further, for the full year 2024, the GDP grew by 2.8% compared to the previous year, 2023. This increase has happened because of the growth in consumer and government spending. Further, let us look at the top 5 best and worst sectors contributing to GDP of Q4.

Top 5 Best Contributor’s	Contribution to GDP (%)
Real estate and rental and leasing	0.38
Professional, scientific, and technical services	0.37
Health care and social assistance	0.34
State and local government	0.24
Finance and insurance	0.21

Top 5 Worst Contributor’s	Contribution to GDP (%)
Other services, except government	-0.06
Durable goods manufacturing	-0.05
Wholesale trade	-0.05
Arts, entertainment, and recreation	-0.03
Administrative and waste management services	-0.03

Also in the U.S. economy, the jobless claims data was released which was reported at 224,000 for the week of 17 to 22 March, with a reduction of 1,000. Jobless claims are the number of Americans who file new applications for unemployment benefits, which fell last week.

Japan Economy Update

During the week, the Prime Minister of Japan, Shigeru Ishiba, expressed serious concerns over the U.S. administration’s recent decision to impose a 25% tariff on automobile imports. He believes this move will adversely impact the Japanese economy, as the automotive sector contributes 3% of Japan’s GDP. This tariff issue could have a significantly negative effect on the economy of Japan.

Impact on Japanese Economy

China Economy Update

During the week, the industrial sector data was released and the Chinese industrial sector saw a 0.3% decline in profits during the initial two months of 2025 in comparison to the last year. The key reasons behind this decline are as follows:

• Deflation: It is one of the major problems that the Chinese economy faces. It has led to a fall in prices, which eventually reduces EBITDA margins for manufacturers, thereby decreasing overall profits.
• Trade War with the U.S.: The ongoing trade war between the U.S. and China has also had a significant impact. In February 2025, the U.S. imposed a 10% tariff on $400 billion worth of Chinese goods, followed by an additional 10% tariff. This has severely affected Chinese exports.

Weak Global Demand: Industries like solar energy and steel are struggling with overproduction, which has reduced domestic consumption. China faces a problem because it primarily supplies these industries.

Ongoing Trade Issues Between China and U.S.

Commodity Market Update

During the week, the weekly inventory data for crude oil and natural gas was released. Let us have a look at it: 

• Crude Oil: Commercial crude oil inventories (excluding the Strategic Petroleum Reserve) were reduced by 3.3 million barrels, which total 433.6 million barrels. This level is around 5% below the five-year average for this time of year.
• Natural Gas: Total working gas in storage was reported at 1,744 billion cubic feet (BCF), up by 37 BCF from the previous week. On a yearly basis, it is 557 BCF less than the same period last year. The vital contribution came from the South Central region, accounting for 725 BCF.

Major Events for Coming Week

Date	Country	Event
01-Apr-25	U.S.	Manufacturing PMI
01-Apr-25	India	Auto Sales
04-Apr-25	U.S.	Employment Change

Bottomline

Looking at the global economic trends, the outlook for next week could be slightly negative for major economies like India, where the tariffs are set to be implemented on 2 April 2025. We need to see how the current leaders of the country handle this economic policy for the betterment of their nation.Investors need to be cautious and do proper research for economic policy analysis and analyse the macroeconomic indicators. Various online platforms are available where they can do stock research and get updates on the latest market news, thus making informed investment decisions. So next week could be important for investors.