New Delhi [India]: A recent report by the Boston Consulting Group (BCG) indicates that India’s economic growth remains stable despite global challenges. The report highlights strong domestic consumption, government-led infrastructure spending, and a resilient services sector as key drivers of economic stability.
However, external risks such as geopolitical tensions and a global economic slowdown could pose potential challenges.
According to BCG, India’s GDP growth for the financial year 2024-25 is expected to range between 6% and 7% year-on-year (YoY). The report noted that most economic growth forecasts remained unchanged or were revised slightly in January and February 2025.
Among major economic institutions:
- Nomura revised its GDP growth forecast downward to 6.0%.
- The Federation of Indian Chambers of Commerce and Industry (FICCI) maintained its projection at 6.4%.
- The International Monetary Fund (IMF) kept its estimate steady at 6.5%.
- The Organisation for Economic Co-operation and Development (OECD) raised its forecast to 6.8%, signaling optimism.
- Moody’s retained the highest estimate at 7.0%.
With GDP growth expectations largely stable, policymakers and industry leaders will closely track key economic indicators in the coming months to assess any potential changes in momentum.
Key Economic Indicators
- Employment Trends: Urban employment declined, while rural employment saw a slight increase in January 2025, leading to a marginal overall drop in employment levels. Demand for work under the MGNREGA scheme increased, reaching a 7-month high.
- Inflation Trends: Wholesale Price Index (WPI) inflation eased in January 2025 compared to December 2024, driven by lower food price inflation and continued deflation in fuel and power prices. Consumer Price Index (CPI) inflation dropped to a five-month low, helped by declining food and energy costs.
- GST Collections: A significant rise in revenue from imports led to a sharp surge in GST collections in January 2025.
- Economic Sentiment: The Future Expectations Index (FEI) and Current Situation Index (CSI) weakened, reflecting subdued sentiment across most economic parameters, except for price levels.
- Trade Balance: India’s merchandise trade deficit widened to USD 23 billion in January 2025 due to a sharp decline in exports, particularly petroleum products. In contrast, the services trade surplus reached a record high, driven by a surge in services exports.
Despite external pressures, India’s economic fundamentals remain strong, and the coming months will be crucial in determining the country’s growth trajectory.