India Ratings Raises Sovereign GDP Growth Estimate for FY25 to 7.1%

India Ratings and Research have revised upward their GDP growth estimate for FY25 to 7.1%, citing strong government expenditure, improved corporate and banking sector balance sheets, and a budding private corporate capex cycle. However, they caution that growth could be constrained by factors such as uneven consumption demand and export challenges due to global economic sluggishness.

Consumption Demand Dynamics

India Ratings highlights that current consumption demand is skewed towards upper-income brackets, with rural consumption remaining weak. They anticipate a surge in private final consumption expenditure to 7% in FY25, up from 3% in FY24, potentially marking a three-year high. The agency underscores the importance of sustained real wage growth for a more inclusive and sustainable consumption recovery.

Capex Outlook

While private sector activity has been subdued for several years, India Ratings sees signs of a new investment cycle emerging, as evidenced by increased project loans sanctioned by lenders. This suggests a potential uptick in private sector capital expenditure in the near future.

Inflation and Monetary Policy

India Ratings forecasts headline inflation to moderate in FY25 but emphasizes the need for continued vigilance from the Reserve Bank of India (RBI). Despite the expected moderation, monitoring inflationary pressures remains crucial for maintaining price stability and supporting economic growth.

Piyush Shukla

Recent Posts

Which District of Uttar Pradesh is known as the Katehar Region?

In Uttar Pradesh, certain areas are recognized by specific regional names that highlight their historical,…

7 hours ago

Which District of Haryana is Known as Brass City?

Haryana is a state in northern India known for its rich history and industrial growth.…

9 hours ago

Govt Should Include Coking Coal in Critical Minerals List: NITI Aayog

The NITI Aayog has recommended adding coking coal to India's critical minerals list, emphasizing its…

9 hours ago

UK and India to Relaunch FTA Talks in Early 2025: Strengthening Bilateral Ties

UK Prime Minister Keir Starmer announced the resumption of Free Trade Agreement (FTA) negotiations with…

10 hours ago

COP29 Tourism Sector Gains Global Support for Climate Action

COP29 marked a significant milestone in global efforts to address climate change within the tourism…

10 hours ago

Bali Celebrates Hindu Festival of Gratitude

Bali is home to a rich cultural heritage that blends Hindu philosophy, local animist traditions,…

11 hours ago