The latest survey released by FICCI here on Thursday predicted an annual median GDP growth forecast for the year 2024-25 at 7% and CPI inflation at 4.5% for the same period.
Despite persisting headwinds, the nation remained amongst fastest fastest-growing economies in the world with economic growth maintaining resilience. While a 7% GDP growth is expected, a minimum and maximum growth of 6.6% and 7.5%, respectively, is further expected.
CPI-based inflation has a median forecast of 4.5% for 2024-25 with a minimum and maximum range of 4.4% and 5%, respectively, revealed the report.
The headline retail inflation rose to a four-month high of 5.1% in June 2024. Food prices remain high and sticky with inflation inching up in cereals, fruits, and milk products. Also, pulses and vegetable segments maintained double-digit inflation levels, the report added.
The median fiscal deficit to GDP ratio has been put at 5.1% for the fiscal year 2024-25 in line with the targeted fiscal deficit for 2024-25 announced in the Interim Budget earlier this year, it further stated.
The median growth forecast for agriculture and allied activities has been put at 3.7% for 2024-25, indicating an improvement with respect to the 1.4% growth seen in the last fiscal year.
The report highlighted that with the withdrawal of the El Niño effect and the IMD predicting a normal southwest monsoon, kharif production is anticipated to be normal. A favourable base is expected to support agricultural growth.
The industry and services sectors are anticipated to clock 6.7% and 7.4% growth respectively during the current fiscal, with respect to respective growth rates of 9.5% and 7.6% in the last fiscal.
The Asian Development Bank (ADB), citing robust expansion in the industrial sector and strong demand in construction led by housing, kept India’s gross domestic product (GDP) growth projection for FY25 unchanged at 7%.
“The stronger-than-expected fiscal position of the central government could provide a further boost to growth. However, this must be weighed against downside risks arising from weather events and geopolitical shocks,” said ADB’s July outlook.
The International Monetary Fund (IMF) also raised India’s growth projection for FY25 by 20 basis points to 7% citing ‘improved prospects’ for private consumption, particularly in rural areas.
The UN body expects gross domestic product (GDP) growth in FY26 to slow down to 6.5%, the same as projected in its April World Economic Outlook (WEO).