In its latest interim economic outlook, the Organization for Economic Co-operation and Development (OECD) has revised India’s GDP growth forecast for the fiscal year 2024-25 (FY25) upwards to 6.2%, a marginal increase from the previous estimate of 6.1%.
Growth Forecast for FY26: Unchanged at 6.5%
- For the fiscal year 2025-26 (FY26), the OECD maintains its growth forecast for India at 6.5%.
- The outlook highlights that despite tighter financial conditions, emerging-market economies, including India, continue to grow steadily. This growth is attributed to improved macroeconomic policies, robust infrastructure investments, and consistent employment gains.
Near-term Momentum and Inflation Trends
- High-frequency activity indicators suggest sustained moderate growth, with services showing stronger activity trends compared to manufacturing.
- Globally, India exhibits strong near-term momentum, contrasting with relative weakness in Europe and mild growth in other major economies.
- Inflation projections indicate a gradual easing in emerging-market economies, influenced by tighter monetary policies and fluctuations in energy and food prices.
- In countries like Brazil, India, Indonesia, Mexico, and South Africa, inflation is expected to converge towards central bank targets by the end of 2025.
Outlook on Indian Economy
- The Indian economy is expected to expand around 7% in FY25, marking the fourth consecutive year of growth post-pandemic.
- There is optimism that India may achieve another year of 7% real growth in FY25, reflecting the resilience and potential of the economy.
Global GDP Projection
- At a global level, the OECD forecasts a slight easing in gross domestic product growth to 2.9% in 2024, recovering to 3% in 2025 as financial conditions ease.