The Indian economy‘s performance in 2024 has cast a shadow over the outlook for 2025, as growth in the July-September quarter slowed to a seven-quarter low of 5.4%, significantly missing analyst estimates. This slowdown is attributed to weak urban consumption, high food prices, and sluggish real wage growth, despite some recovery in rural demand. With private consumption, which accounts for 60% of GDP, suffering, calls for a rate cut by the RBI have intensified.
Despite these challenges, there is cautious optimism for 2025. The government remains confident in a growth rebound, citing signs of improved capital formation, better public expenditure, and a recovery in infrastructure spending. Key factors like a promising rabi harvest, moderating food inflation, and a decline in global oil prices are expected to alleviate some of the economic pressure.
Forecasts for 2025 show a range of growth predictions: S&P Global Ratings anticipates a 6.9% growth, citing strong urban consumption, services growth, and infrastructure investment. Deloitte projects a similar growth trajectory with continued resilience in consumption and manufacturing exports, especially in high-value sectors like electronics and semiconductors. Moody’s Ratings, while predicting 6.6% growth for 2025, highlights India’s solid growth potential coupled with moderating inflation.
The global landscape also poses challenges, with geopolitical tensions and potential US-China trade disruptions. However, India could benefit from these shifts, solidifying its position in global supply chains.
In conclusion, while risks remain, including domestic inflation pressures and global uncertainties, the Indian economy is expected to show resilience and could still achieve robust growth in 2025, largely driven by domestic consumption and infrastructure development.
From Call Centers to Code: The Dynamic Evolution of India’s IT Industry
Women Entrepreneurs in India: Overcoming Challenges and Shaping the Future.
#IndianEconomy #GrowthOutlook #Inflation #GeopoliticalChallenges
