India’s economy to attain size of USD 34.7 trillion by 2047: PHDCCI
The Indian economy is displaying robust growth post Covid pandemic despite continued global headwinds, the industry body said.
S&P Global on Tuesday raised India’s gross domestic product (GDP) growth forecast for Financial Year 2024-25 by 40 basis points to 6.8 per cent, while Indian economy is estimated to have clocked a growth of 7.6 per cent in FY24.
The growth projection for the current fiscal is lower than the Reserve Bank of India (RBI) and government’s projection of 7 per cent.
In a report called Economic Outlook Asia-Pacific Q2 2024: APAC Bides Its Time On Monetary Policy Easing, the New York-based agency retained India’s GDP growth prediction for FY26 and FY27 at 5 per cent.
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S&P said that in domestic demand-led economies such as India, Japan, and Australia, the impact of high interest rates and inflation on household spending had reduced sequential GDP growth in the second half of FY24.
India is likely to see rate cuts of up to 75 basis points in calendar year 2024, it added.
On the developed economies in the Asia-Pacific, the agency expected the growth to pick up in trade-dependent ones such as South Korea, Taiwan, and Singapore, and fall in relatively domestic demand-led ones such as Japan and Australia.
However, China’s GDP growth is likely to slow down to 4.6 per cent in FY25 from 5.2 per cent in FY24.
“Our forecast factors in continued property weakness and modest macro policy support. Deflation remains a risk if consumption stays weak and the government responds by further stimulating manufacturing investment,” said S&P.
”In India, slowing inflation, a smaller fiscal deficit and lower US policy rates will lay the ground for the Reserve Bank of India to start cutting rates. But we believe more clarity on the path of disinflation could push this decision at least to June 2024, if not later,” it said.
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