According to a senior official from the ministry of statistics and programme implementation (MoSPI), India’s economic growth could reach 7.2% in FY25 or perhaps exceed it. The official cited several high frequency indicators that have increased, especially since August.
The official stated, “The sub-7% growth in Q1FY25 will be offset by higher than expected growth in the other three quarter’s growth prints.” The individual continued, “Also, the data that’s coming in shows the growth (of 6.7%) could be revised upward.”
For the current financial year, the Reserve Bank of India (RBI) has predicted that India’s GDP will increase by 7.2%. Nonetheless, analysts predict that the whole year growth may be roughly 7% or even less due to a slower than anticipated rise (of 7.1% in Q1FY25). The country’s GDP is expected to expand by 7% in FY25, according to projections from the World Bank and the International Monetary Fund.
According to the ministry official, increased consumption (between July and March) is anticipated due to improved monsoon and reduced inflation, which will also result in increased manufacturing production.
The statistics on GST revenues indicate a strong yearly increase. The growth of the IIP (Index of Industrial Production) is decent so far, but it will probably increase in the upcoming months, the official stated. While IIP indicates the level of industry output, monthly GST collecting data indicates economic consumption activities.
The average monthly growth in GST collections in FY25 has been 10.1% thus far from April to August, but finance ministry officials expect that the growth would average more than 11% for the entire year. Between April and August of FY24, the growth in GST collections averaged 11.3%, compared to an average of 11.7% in FY24. During the April-July period of FY25, the average IIP growth was 5.2%, compared to 5.1% during the same time in FY24.
“Household consumption is poised to grow faster in Q2 as headline inflation eases, with a revival of rural demand already taking hold,” according to a recent study by the RBI staff.
The staff document stated that as businesses market their products to older consumers who lead healthier lifestyles, the demand for fast-moving consumer goods (FMCG) is also rising. According to the report, increasing recruiting by e-commerce majors prior to the festival season—not just in metro areas but also in tier 2 and tier 3 cities—is another way to enhance consumption.
Leave a Reply