S&P claims – India’s growth rate will be 6.8% in FY25 and 6.6% in FY26

New Delhi| India’s growth rate may remain at 6.8 per cent in FY 2024-25 and 6.6 per cent for 2025-26 despite slowing down. These are very strong figures. S&P Global Market Intelligence has made this estimate in its latest update. According to the agency, despite the slowdown in economic momentum due to weak public sector investment, India’s economy is being positively impacted by several other factors.

According to S&P, domestic demand is expected to increase due to reduction in inflation, favorable monsoon conditions and increase in social expenditure of the government. Additionally, healthy corporate balance sheets are playing an important role in the recovery of private investment.

S&P Global Market Intelligence has released the Global Economic Forecast Update for the month of October, which emphasizes stable global economic expansion with the help of policy incentives while acknowledging risks from geopolitical factors.

According to the update, decline in inflation outlook and relaxation in monetary policies have been cited as the main reasons for the slowdown in the global economy. “The global economy is on track for a soft landing, inflation rates are falling and monetary policy easing is becoming more widespread”, said Ken Watret, global economist at S&P Global Market Intelligence. Nevertheless, geopolitical developments have the potential to slow or even derail enlargement.”

The report projects annual real GDP growth rates of 4.3 percent in 2024 and 4.4 percent in 2025 for the region excluding China and Japan. Assisting this growth is flexible domestic demand, as regional central banks take a more accommodative monetary stance.

The start of the US Federal Reserve’s easing cycle in September is making more room for interest rate cuts, prompting several central banks, including the Philippines, New Zealand, Hong Kong SAR and Indonesia, to lower rates. According to S&P Global Market Intelligence the global economic outlook remains positive, but there are risks. Geopolitical tensions could potentially derail economic progress, especially in areas where uncertainties are high. Nevertheless, policy measures aimed at stimulating growth, while at the same time containing inflation, are setting the stage for sustainable economic expansion.

According to Deloitte India’s Economy Outlook for October 2024, India’s annual GDP growth rate for FY 2024-25 is projected to be 7.0 per cent-7.2 per cent, despite the recent slowdown in quarterly growth. In the April-to-June quarter of FY 2024-25, India’s GDP grew by 6.7 per cent year-on-year, reflecting the slowest growth in the last five quarters.