Recent projections for India’s Gross Domestic Product (GDP) growth in the fiscal year 2024-25 (FY25) present a spectrum of expectations from various financial institutions and government bodies. These forecasts, while differing in specifics, collectively underscore India’s robust economic trajectory amid global uncertainties.
Reserve Bank of India’s (RBI) Projection
The Reserve Bank of India has maintained a GDP growth projection of 7% for FY25. This forecast is predicated on factors such as anticipated normal monsoon patterns, easing inflationary pressures, and sustained momentum in both manufacturing and services sectors. RBI Governor Shaktikanta Das emphasized that strengthening rural demand, improving employment conditions, and robust private consumption are expected to bolster economic growth.
International Monetary Fund (IMF) Outlook
The International Monetary Fund projects a moderation in India’s GDP growth, estimating a decline from 8.2% in 2023 to 7% in 2024, and further to 6.5% in 2025. This anticipated slowdown is attributed to the exhaustion of pent-up demand accumulated during the COVID-19 pandemic, as the economy realigns with its potential output levels.
Asian Development Bank (ADB) Forecast
The Asian Development Bank has retained its growth forecast for India at 7% for FY25, consistent with its earlier projections. The ADB attributes this steady growth outlook to robust investment demand from both public and private sectors, alongside a gradual improvement in consumer demand. The bank also notes that while GDP growth slowed to 6.7% in the first quarter (April-June) of FY24, it is expected to accelerate in subsequent quarters, supported by improved agricultural output and a positive outlook for industry and services.
Deloitte India’s Estimates
Deloitte India projects a GDP growth rate of 6.6% for FY25, slightly below other forecasts. This projection is based on factors such as consumption expenditure, a rebound in exports, and capital inflows. Deloitte anticipates that the global economy will witness a synchronous rebound in 2025, which could positively influence India’s economic performance through improved capital flows and export demand.
Government’s Economic Survey
According to the 2023-24 Economic Survey, India’s economy is projected to grow by 6.5% to 7% in the fiscal year ending March 2025. This projection is slightly lower than the RBI’s forecast and reflects a cautious optimism about the country’s economic prospects, considering both domestic and international economic conditions.
Factors Influencing Growth Projections
Several key factors are influencing these varied growth projections:
- Domestic Consumption: A significant driver of GDP growth, domestic consumption is expected to improve, driven by rural consumption fueled by stronger agricultural performance and robust urban consumption.
- Investment Demand: Both public and private sector investments are anticipated to contribute to economic growth, with infrastructure development playing a pivotal role.
- Global Economic Environment: Global economic conditions, including demand for exports and capital flows, are crucial in shaping India’s economic outlook.
- Inflationary Pressures: Moderating inflation is expected to support economic growth by enhancing purchasing power and consumer confidence.
Conclusion
While projections for India’s GDP growth in FY25 vary among institutions, ranging from 6.5% to 7%, the consensus indicates a continuation of robust economic performance. Factors such as domestic consumption, investment demand, and global economic conditions will play critical roles in determining the actual growth trajectory. Policymakers and stakeholders will need to navigate these dynamics carefully to sustain and enhance economic growth in the coming fiscal year.
