The consulting firm Deloitte has projected India's GDP growth to reach 6.6% in the financial year ending March 2025, driven by a strong rebound in consumption, exports and capital inflows.
In its latest quarterly economic outlook report, Deloitte said private consumption expenditure, which accounts for nearly 60% of GDP, is expected to continue supporting India's economic expansion. This is backed by a rising affluent population with higher spending power.
Deloitte also sees exports picking up momentum as global demand recovers. After grappling with supply chain disruptions and high inflation in recent years, international trade is showing signs of normalization which will benefit India's merchandise and service exports.
Improved capital inflows amid expectations of more stable financial market conditions worldwide present another growth driver. Foreign investments meet critical needs for financing India's large infrastructure development plans.
While inflation remains a challenge, Deloitte believes other factors such as good monsoon rains and easing global commodity prices will create some inflation relief. The economic damage caused by high prices should be contained.
At the same time, Deloitte notes ongoing geopolitical tensions and their fallout continue posing downside risks to the outlook. Growth projections can be impacted if external shocks to commodity supply and costs persist.
Overall, India's supportive economic fundamentals and the government's ongoing reform agenda are expected to place the country on a steady path of recovery and expansion over the coming year. Maintaining macroeconomic stability will be key to sustaining growth momentum at close to 7%.
