India’s economic growth outlook remains stable despite global uncertainties according to a report by Boston Consulting Group (BCG).
The retention of most forecasts indicates confidence in domestic economic resilience, supported by factors such as strong consumption, government infrastructure spending, and a robust services sector. However, external risks, including geopolitical tensions and global economic slowdown, could pose challenges.
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It says India’s GDP growth for the financial year 2024-25 is expected to remain within the range of 6 per cent to 7 per cent year-on-year.
The report highlighted that most economic growth forecasts were either retained or revised slightly during January and February 2025. Among major institutions, the report mentioned that Nomura lowered its GDP growth projection to 6.0 per cent, marking a downward revision. The Federation of Indian Chambers of Commerce and Industry (FICCI) maintained its forecast at 6.4 per cent, while the International Monetary Fund (IMF) also kept its estimate unchanged at 6.5 per cent.
The Organisation for Economic Co-operation and Development (OECD) revised its projection upwards to 6.8 per cent, reflecting optimism about India’s economic trajectory. Moody’s, on the other hand, retained its forecast at 7.0 per cent, the highest among the estimates mentioned.With GDP growth expectations largely steady, policymakers and industry stakeholders will closely monitor key economic indicators in the coming months to assess any potential shifts in the country’s growth momentum.
The report also added that the Urban employment rate declined, while the rural employment rate saw a slight uptick in Jan’25, leading to a marginal drop in overall employment. Both MGNREGA work demanded & employment provided inched slightly upwards in Jan’25, reaching a 7-month high. The WPI inflation eased slightly in Jan’25 vs. Dec’24, driven by lower food price inflation and continued fuel and power price deflation CPI inflation dipped to a five-month low in Jan’25, as food price inflation eased alongside a decline in energy costs (fuel and light).
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The report stated that the GST collections surged sharply, driven by a significant jump in revenue from imports from the previous year. Meanwhile, the Future Expectations Index (FEI) and Current Situation Index (CSI) weakened, reflecting subdued sentiment across most survey parameters, except for price levels.On the trade front, the merchandise trade deficit widened to $23 Billion in Jan’25 as exports declined, driven by a significant fall in petroleum products exports. In contrast, services trade surplus hit a record high, fuelled by a sharp rise in services exports.