S&P Global Ratings Anticipates 6.8% Growth for India's Economy in FY25
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New Delhi, Dec 10 (NationPress) S&P Global Ratings revealed on Tuesday an expected growth of 6.8 percent for the Indian economy in FY25, with a subsequent rise to 6.9 percent in FY26, fueled by strong urban consumption, consistent growth in the service sector, and continuous infrastructure investments.
This growth forecast by S&P Global Ratings surpasses the recent prediction from the Reserve Bank of India (RBI), which estimates India’s GDP growth for 2024-25 at 6.6 percent, a decrease from the earlier 7.2 percent.
The global credit rating agency also anticipates a 7.0 percent GDP growth for the Indian economy in FY27, sustaining its optimistic outlook for a nation that continues to be the fastest-growing economy globally.
“We foresee the central bank making slight adjustments to monetary policy in 2025 as inflationary pressures diminish,” stated Vishrut Rana, economist at S&P Global Ratings.
The Indian economy is poised for robust growth in 2025. “Currently, we project 6.8 percent growth for FY 2024/25, followed by 6.9 percent growth in FY 2025/26,” Rana elaborated.
The GDP growth for Q2 (June-September 2024) in FY25 was recorded at 5.4 percent, which was below expectations.
Nevertheless, the nation has been experiencing rapid growth amidst a slowing global economy, thanks to the government’s prudent fiscal management aimed at achieving macroeconomic stability. This fiscal strategy has effectively balanced the fiscal deficit with necessary support for growth.
According to the outgoing RBI Governor Shaktikanta Das, India’s growth narrative remains strong as “high-frequency indicators suggest that the slowdown in domestic economic activity reached its lowest point in the second quarter of this year and has since rebounded, supported by robust festive demand and a revival in rural activities.”
Industrial performance is also projected to stabilize and recover from the lows of the previous quarter, Das added.
S&P Global Ratings highlighted that increased labor force participation, further enhancements in infrastructure and technology, and stronger public and household financial positions can bolster economic growth in India.
“Improved urban infrastructure and better job quality can stimulate labor force participation,” remarked Rana.
In its recent Monetary Policy Committee (MPC) meeting, the central bank announced a 50 bps reduction in the cash reserve ratio (CRR), which will inject over Rs 1.16 lakh crore of liquidity into the economy.
