India’s GDP Growth: In its latest World Economic Outlook report, released on October 22, the International Monetary Fund (IMF) maintained its projection for India’s GDP growth rate at 7% for the fiscal year (FY) 2024-2025.
IMF said that India’s GDP growth to moderate from 8.2% in 2023 to 7% in 2024 and 6.5% in 2025. IMF said that the economy is returning to its pre-pandemic growth trajectory as the pent-up demand accumulated during the pandemic has been exhausted.
The IMF is more optimistic regarding inflation, forecasting a 4.4% increase in consumer prices compared to the previous year, an improvement from the 4.6% estimate given in April. On Global cues, IMF chief economist Pierre-Olivier Gourinchas said, “Despite the good news on inflation, downside risks are increasing and now dominate the outlook. An escalation in regional conflicts, especially in the Middle East, could pose serious risks for commodity markets.”
Meanwhile, Deloitte, in its ‘India Economy Outlook for October 2024’, forecasts India’s economic growth to range between 7% and 7.2% in the current fiscal year. Deloitte emphasised that this will be fuelled by robust government expenditure and a surge in manufacturing investments.
Deloitte noted that a growing manufacturing sector, stable oil prices, and potential US monetary easing after the elections could drive capital inflows, lower production costs, and create more long-term investment and job opportunities.
India’s GDP Growth: What Else?
The Reserve Bank of India (RBI) maintained its fiscal year 2024-2025 (FY25) growth projection for India at 7.2%. The central bank has been anticipating a 7.4% expansion in the second half of the fiscal year 2024-2025. Recently, RBI revised its GDP growth prediction for India for second quarter of fiscal year 2024-25. The central bank has revised downward its GDP growth forecast by 20 basis points to 6.8%. Notably, RBI had earlier predicted a GDP growth of 7% for the second quarter.
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