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Indian economy projected to grow at 6.5-7% in FY25: Finance ministry

29 Oct '24
1 min read
 Indian economy projected to grow at 6.5-7% in FY25: Finance ministry
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Insights

  • The September Monthly Economic Review by India's department of economic affairs projects an optimistic economic outlook for FY25, with a 6.5-7 per cent estimated growth rate.
  • Global geopolitical tensions could pose significant risks to this outlook, it said.
  • Projected positive agricultural output, festive demand spikes and government spending hikes are anticipated to spur investment activity.
The September Monthly Economic Review by the department of economic affairs under the Indian ministry of finance projects an optimistic economic outlook for the country for this fiscal, with growth rates estimated between 6.5 per cent and 7 per cent.

However, global geopolitical tensions, particularly escalating conflicts and growing geo-economic fragmentation, could pose significant risks to this outlook, the review document said.

"Their spillover effects on India could cause negative wealth effects, impacting household sentiments and altering spending intentions on durable goods," it said.

The potential for disruptions in global trade and finance stemming from unpredictable trade policies of major economies may affect India’s external sector, despite its current stability, it noted.

Domestic factors are strong, with an expected positive agricultural output, festive demand spikes and projected increases in government spending that are anticipated to spur investment activity.

Stable demand conditions are crucial, but needed monitoring, particularly as high food prices have recently led to localised inflation pressures, the ministry said.

"However, at the margin, demand conditions in the economy bear watching. Given the overall subdued inflation, barring a few food items, the real price of money may have gone up," it added.

Fibre2Fashion News Desk (DS)

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