- Business Inflation Expectations Survey (BIES) – August 2025 shows uptick in inflation outlook, subdued sales and profit margins
NE ECONOMY BUREAU
AHMEDABAD, OCT 2
India Inc.’s inflation outlook inched higher in August 2025 even as businesses continued to grapple with mounting cost pressures, weak sales, and subdued profit margins, according to the latest Business Inflation Expectations Survey (BIES) shared by the Indian Institute of Management Ahmedabad.
The survey revealed that one-year-ahead business inflation expectations rose to 4.45% in August, up 28 basis points from 4.17% in July 2025. Firms’ average inflation expectations over the past year, however, remained anchored at 4.23%. Notably, the uncertainty around inflation eased marginally, with the expectation variance declining to 1.85% from 1.94% in July.
In parallel, businesses projected one-year-ahead CPI headline inflation at 4.27%, an uptick from 4.13% in June 2025. CPI inflation uncertainty was reported low at 0.95%.
Cost Pressures Mount
The BIES data signaled renewed cost pressures across firms. The proportion of companies perceiving a “significant or very significant” cost increase (above 6%) jumped to 31% in August from 26% in July, highlighting intensified input price burdens.
Sales Remain Subdued
Weak demand conditions persisted, with more than 60% of businesses reporting sales “much less” or “somewhat less” than normal during June–August 2025. The share of firms citing “about normal” or higher sales slipped further to 36% in August from 39% in July.
Profit Margins Under Strain
Profit expectations also remained under pressure. Over 60% of firms reported lower-than-normal profit margins, while only 39% indicated “about normal” or better margins — unchanged from July.
The BIES, conducted monthly by the RBI, captures the views of Indian businesses on inflation, costs, sales, and profit margins to gauge forward-looking economic conditions.
