India is likely to see the GDP growth by 6.5 per cent in 2024-25, said India Ratings and Research on Thursday, representing a decline from the statistics ministry’s first advance estimate of 7.3 per cent for the current Financial Year.

As per the India Ratings report, Rs 3.53 lakh crore was raised in 2022-23 to finance a total of 982 large projects of over Rs 1,000 crore. This is significantly higher than the Rs 1.98 lakh crore raised to finance 791 such projects in 2021-22.

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It further expected the private final consumption expenditure to grow by 6.1 per cent in 2024-25, up from 4.4 per cent in 2023-24.

However, India Ratings’ economists caution that the current consumption trend, which is skewed in favour of goods and services purchased largely by those in the upper income bracket, is not sustainable.

For sustained growth in consumption, demand for goods and services consumed by households belonging to the lower income bracket also has to pick up, India Ratings said in its outlook for next year, they added.

In terms of inflation, India Ratings’ forecast is broadly in line with that of the Reserve Bank of India, with CPI seen at 5 per cent in the first quarter of 2024-25 before easing to 4.1 per cent in July-September.

Meanwhile for 2024-25 as a whole, India Ratings’ forecast for headline retail inflation is 4.8 per cent, 30 basis points higher than the Indian central bank’s projection of 4.5 per cent.

“The RBI’s guidance with respect to retail inflation and its trajectory during the four quarters of 2024-25 suggests that retail inflation will be higher than the target 4 per cent. Therefore…RBI will remain cautious and watchful and is unlikely to change either the stance or the policy rate any time soon,” India Ratings said.

“If monsoon remains normal in 2024 and there are no adverse weather or geopolitical events, then the RBI may resort to monetary easing in the second half of 2024-25,” it added.