Talking about tailwinds for the next financial year, the report said prospects of healthy Rabi harvesting, sustained manufacturing profitability and underlying service resilience are expected to support economic activity in FY25
New Delhi:
The outlook for the Indian economy appears ‘bright’ with GDP likely to clock 7 per cent growth rate next fiscal although the nation needs to keep a watch on global headwinds emanating from geopolitical tensions and volatility in international financial markets, a finance ministry report said on Tuesday.
During the current financial year, the Indian economy is estimated to grow at 7.3 per cent. This would be the third year in the row when the GDP would grow in excess of 7 per cent.
Driven by a better-than-expected performance in Q2 and above 7 per cent growth projection for FY24 (by Ministry of Statistics and Programme Implementation in its first advance estimates), many global agencies have revised India’s growth projection in the upward direction, the Monthly Economic Review released by the finance ministry said.
This reflects the resilience of the Indian economy to sustain its growth path amidst ongoing geopolitical headwinds, it said, adding, the measures announced in the Interim Union Budget FY25 are expected to play a pivotal role in supporting India’s growth journey ahead.
Talking about tailwinds for the next financial year, the report said prospects of healthy Rabi harvesting, sustained manufacturing profitability and underlying service resilience are expected to support economic activity in FY25.
On the demand side, household consumption is expected to improve, while prospects of fixed investment remain bright owing to an upturn in the private capex cycle, improved business sentiments, healthy balance sheets of banks and corporates, and the government’s continued thrust on capital expenditure, it said.
Improvement in the outlook for global trade and rising integration in the global supply chain will support net external demand, it said.
However, headwinds from geopolitical tensions, volatility in international financial markets, and geoeconomic fragmentation need watching, it said.