Monday, February 17, 2025

Indian Economy Projected To Grow At 6.6 Pc : Ind-Ra

Must Read

India ratings and Research (Ind-Ra) has projected the Indian economy to grow at 6.6 percent for FY25-26, up from 6.4 percent in the current fiscal year. It anticipates investment to be the key driver for the Indian economy just like in FY22 and FY24.

In recent quarters, the Indian economy had experienced cyclical slowdowns. However, Ind-Ra expects this to reverse starting in the December quarter. It pointed out that the lingering after-effects of COVID-19 pandemic, impacted the GDP growth in FY24. In addition to this, the base effects also impacted the quarterly growth figures.

- Advertisement -

The general elections held in May 2024 along with a strong base effect impacted the growth rate for the June quarter of FY25. While sluggish private sector capital expenditure continued to have an impact over the July–September period.

Further the agency points out that the Indian economy is currently navigating through tight fiscal, monetary and external factors. Although, it expects the monetary conditions to ease. It expects fiscal and external tightening pressures to persist through FY26.

- Advertisement -

Devendra Kumar Pant, Chief Economist and Head of Public Finance at Ind-Ra, stressed that despite these challenges, he expects India’s FY26 GDP growth to match the best decadal growth that India has seen between FY11 and FY20.

However, when it comes to inflation and growth then the outlook depends upon external factors as well. For instance, it depends upon potential tariff wars or capital outflows.

- Advertisement -

Overall, it expects retail inflation to average at 4.4 percent in FY26, down from its FY25 estimate of 4.9 percent. Ind-Ra further states, “The timing of rate cut would depend on how the forthcoming data — arithmetic of the FY26 Union Budget, inflation trajectory and evolving domestic and global landscape — gels with the RBI’s flexible inflation targeting approach.”

Meanwhile, the merchandise trade account is expected to remain in deficit of USD 308 billion in FY26. It was USD 244.9 billion in FY24.

 

 

- Advertisement -

More articles

- Advertisement -

Latest Article