New Delhi: India’s Gross Domestic Product (GDP) growth for 2024-25 (FY25) is projected to exceed 7 per cent, potentially reaching up to 7.5 per cent, according to the monthly economic review by the National Council of Applied Economic Research (NCAER) released on Wednesday. The report attributes this outlook to robust economic activity in the first quarter, policy focus on investment and growth, and expectations of a normal monsoon.
“This outlook is underpinned by the buoyancy in economic activity witnessed in the first quarter; a keen policy focus on investment, growth, and macroeconomic stability; and the expectations of normal monsoon,” said NCAER director-general Poonam Gupta.
The Reserve Bank of India (RBI) has also revised its projections for India’s real GDP growth for FY25, raising it to 7.2 per cent from 7 per cent. Other agencies have similarly upgraded their growth projections, with the median forecast now at 6.9 per cent.
On a global scale, growth projections for 2024 have been revised upward by the International Monetary Fund (IMF), the World Bank, and other rating agencies, with expectations of a growth rate between 2.6 and 3.2 per cent.
Gupta noted that with inflation appearing to have peaked, further tightening of monetary policy is unlikely. “The global environment seems benign as well in the absence of any known global risks so far,” Gupta added.
Retail inflation eased to a 12-month low of 4.7 per cent in May. However, taming food inflation remains a challenge. “A broader policy framework may be needed to address this issue. These include building climate-resilient food supply along with a gentle shift towards packaged and preserved foods. This will bridge the periodic supply and demand gap that has become routine,” Gupta said.
High-frequency indicators show resilience in the Indian economy. The Index of Industrial Production (IIP) for core industries saw accelerated growth in April 2024. Despite some deceleration in personal credit growth, bank credit growth remained above 20 per cent. Expectations of an ‘above normal’ monsoon, despite deficient rainfall in June, remain strong for the farm sector.
The Purchasing Managers’ Index (PMI) for both manufacturing and services continued to expand, albeit at a slightly slower pace in May, according to the NCAER report.
 growth for 2024-25 (FY25) is projected to exceed 7 per cent, potentially reaching up to 7.5 per cent, according to the monthly economic review by the National Council of Applied Economic Research (NCAER) released on Wednesday. The report attributes this outlook to robust economic activity in the first quarter, policy focus on investment and growth, and expectations of a normal monsoon.){kind=link}