July 18, 2024
The industry and services sectors are anticipated to expand by 6.7% and 7.4%, respectively
Inflation, measured by the CPI, is projected to remain stable at 4.5% for the fiscal year
Economists foresee a gradual moderation in inflation rates, particularly with improved agricultural output later in the year
The RBI may adopt a cautious approach to monetary policy, potentially reducing the policy repo rate to 6% by March 2025
The Federation of Indian Chambers of Commerce and Industry (FICCI) Economic Outlook Survey for 2024-25 predicts a promising 7% GDP growth rate for the Indian economy, despite global challenges. According to the survey, the agriculture sector is set to grow by 3.7%, driven by favourable monsoon expectations and reduced El Nino effects. Meanwhile, the industry and services sectors are projected to expand by 6.7% and 7.4%, respectively.
Inflation, measured by the Consumer Price Index (CPI), is expected to remain stable at 4.5% for the fiscal year 2024-25, with food prices showing resilience amidst other inflationary pressures. Economists participating in the survey anticipate a gradual moderation in inflation rates, particularly with improved agricultural output in the latter part of the year.
Economists suggest that the Reserve Bank of India (RBI) may adopt a cautious approach to monetary policy, delaying potential rate cuts until later in the fiscal year to effectively manage inflationary risks. The policy repo rate is expected to decrease marginally to 6% by March 2025.
Economists emphasised the need for targeted reforms to sustain economic momentum. Key priorities include taxation reforms to stimulate consumption and savings, measures to boost employment through skill development initiatives, and continued support for innovation and sustainable development initiatives, particularly in sectors like agriculture and manufacturing.
Source: CNBC TV18