Deloitte India Predicts Economic Growth Between 7% and 7.2% in FY25

Deloitte’s India Economic Outlook for August 2024 predicts strong economic growth between 7.0% and 7.2% in FY25, driven by robust economic fundamentals. This surpasses the Economic Survey’s prediction but aligns with the Reserve Bank of India’s outlook. However, Deloitte also pegs FY25 GDP growth at 6.6%, raising its FY24 prediction.

FY25 GDP Growth Forecast

• Deloitte India: 6.60%
• World Bank: 6.60%
• IMF: 6.80%
• S&P Global Ratings: 6.80%
• ADB: 7%
• Fitch: 7%
• RBI: 7%
• PHDCCI: 8-8.3%

Inflation and Consumption

Deloitte expects inflation to remain above the Reserve Bank of India’s target level of 4% due to strong economic activity. Rising consumption expenditure is likely to drive GDP growth to 6.6% in FY25. The consultancy raised the FY24 GDP growth prediction to 7.6-7.8% from 6.9-7.2%.

Shifts in Consumption Patterns

Post-pandemic, there is a visible shift in consumption patterns, with demand for luxury and high-end products growing faster than for basic goods. Deloitte predicts that by 2030/31, the number of middle- to high-income households will increase significantly, driving overall private consumer expenditure growth.

Economic Recovery and Investment

According to Rumki Majumdar, economist at Deloitte India, the difference between actual GDP and pre-COVID GDP has been narrowing as growth picks up pace. Strong government spending on infrastructure has helped maintain a steady recovery momentum.

Future Projections

For FY26, Deloitte predicts India’s GDP to grow at 6.75% on the back of rate cuts. The global economy is expected to rebound in 2025, improving capital flows and exports for India. The IMF and World Bank have also raised their growth forecasts for India, reflecting strong domestic demand and a rising working-age population.