Deloitte Projects Indian Economy to Grow 6.5-6.8% in FY 2024-25

Deloitte India has revised its GDP growth projection for the fiscal year 2024-25 to a range of 6.5% to 6.8%, citing global trade uncertainties and domestic challenges. The firm emphasizes the need for cautious optimism as the economy navigates these complexities.

Key Factors Influencing Growth Projections

Global Trade and Investment Uncertainties: Deloitte highlights the impact of rising global trade and investment uncertainties on India’s economic outlook.

Domestic Consumption: Despite challenges, strong rural consumption, supported by robust agricultural output and increased spending power, remains a positive contributor to economic growth.

Services Sector Performance: The services sector continues to thrive, with significant contributions from finance, insurance, real estate, and business services, bolstering overall economic activity.

Manufacturing Exports: India’s position in global value chains is advancing, evident by the rising share of high-value exports in electronics and machinery, indicating a shift towards more sophisticated manufacturing exports.

Capital Markets Resilience: Despite foreign institutional investor withdrawals due to geopolitical tensions and other factors, domestic institutional investors have provided stability, reducing the capital market’s sensitivity to external shocks.

Comparative Analysis with Other Projections

Reserve Bank of India (RBI): The RBI has adjusted its annual growth forecast to 6.6%, reflecting a more conservative outlook amid global uncertainties.

National Statistical Office (NSO): The NSO estimates GDP growth at 6.4% for the current fiscal year, aligning with a cautious economic outlook.

PHD Chamber of Commerce and Industry (PHDCCI): PHDCCI projects a higher growth rate of 6.8% for FY2024-25, driven by enhanced business efficiency and an investment-friendly climate.

United Nations (UN): The UN forecasts India’s economy to grow by 6.6% in 2025, supported by robust private consumption and investment.

Outlook

Deloitte’s revised projection underscores the need for strategic adaptation to global economic shifts and a focus on leveraging domestic strengths to sustain growth. While challenges persist, India’s economic fundamentals, including strong domestic consumption and a resilient services sector, provide a solid foundation for the projected growth trajectory.

Summary of the news