India’s Economic Growth to Remain Steady in FY25, Expected to Reach 6.7% in FY26

Mumbai, Dec 13 (NationPress) India's economic growth is poised to remain stable in FY25, notwithstanding global uncertainties, with a projected GDP growth of 6.7% in FY26, as indicated by a report published on Friday.

According to CareEdge Ratings, the Indian government is expected to maintain its course of fiscal consolidation, forecasting a GDP growth rate of 6.5% for FY25 and 6.7% for FY26.

“We anticipate an uptick in private investment throughout 2025, bolstered by expected monetary policy easing,” remarked Sachin Gupta, Chief Rating Officer and Executive Director at CareEdge Ratings.

The report indicates that CPI inflation is likely to ease in the upcoming quarters, with food inflation expected to decline, driven by a robust kharif harvest and favorable conditions for rabi sowing.

The CPI inflation, excluding vegetable prices, has consistently remained below 4% in recent months. The projected average CPI inflation is 4.8% for FY25 and 4.5% for FY26.

Core inflation is anticipated to remain modest, averaging 3.5% in FY25 and 4.3% in FY26. Furthermore, WPI inflation is forecasted to average 2.5% in FY25 and 3% in FY26.

“We expect economic growth to rebound in H2 FY25, fueled by a recovery in consumption and an increase in government capital expenditure. Strong agricultural output and a thriving services sector will support a GDP rebound,” stated Rajani Sinha, Chief Economist at CareEdge Ratings.

Regarding government finances, net revenue collection is expected to align with the budgetary targets.

The report anticipates the RBI to reduce the policy interest rate by 50-75 bps in 2025, coinciding with a decrease in food inflation.

In summary, the report estimates India’s current account deficit (CAD) will remain manageable at 0.9% of GDP in FY25.

On the external front, merchandise exports are projected to increase by 2.5%, while service exports are expected to experience a robust growth of 13% in FY25.