The Finance Ministry on Friday stated that India’s economic prospects for the next fiscal year appear promising, citing an increase in private investment and a downward trend in inflation.
According to the Monthly Economic Review, the inclusion of Indian bonds in the Bloomberg bond index starting from January 2025 is expected to bolster inflows into the country. The report highlighted robust investment activity driving growth alongside a steady rise in consumption.
The Department of Economic Affairs’ February edition of the review observed that the sustained emphasis on public investment appears to have encouraged private investment as well.
The National Statistical Office (NSO) has revised upwards the GDP growth estimate for the current fiscal year to 7.6 per cent from 7.3 per cent. India has consistently grown above 8 per cent for three consecutive quarters, solidifying its status as a standout performer amidst sluggish global growth trends. Multiple agencies have adjusted their FY24 growth forecasts for India closer to 8 per cent, reinforcing the positive outlook.
The review expressed optimism about increased demand for residential properties in tier-2 and tier-3 cities, which bodes well for further construction activity.
Non-farm employment has shown signs of revival, improving the capacity to absorb labor transitioning from agriculture. The manufacturing sector is anticipated to witness significant employment growth, driven by the upscaling of enterprises and the emergence of sunrise sectors as catalysts for generating quality employment.
Despite potential challenges such as indications of rising crude oil prices and global supply chain disruptions, the review emphasised India’s overall positive outlook for FY25. It anticipates strong growth, stable inflation, a favorable external account, and a progressive employment scenario contributing to a positive conclusion to the current financial year.
Regarding inflation, the review noted a positive outlook for the upcoming months, with core inflation trending downwards, signaling a broad-based moderation in price pressures. Additionally, the anticipated increase in summer sowing is expected to help alleviate food prices.
