India’s Economic Growth Forecast: Insights from S&P Global Market Intelligence
India’s economy is expected to grow at an average rate of 6.8% for the fiscal year 2024-25 and 6.6% for 2025-26, according to S&P Global Market Intelligence. Despite a slowdown due to weaker public-sector investment, positive factors like easing inflation, favorable monsoon, and increased government social spending are boosting household demand. Healthy corporate balance sheets are also supporting private investment recovery.
Global Economic Outlook
S&P Global Market Intelligence’s October Global Economic Forecast update highlights a steady global economic expansion, supported by policy stimulus. The report notes moderating inflation and easing monetary policies as key factors for a “soft landing” of the global economy. Ken Wattret, a global economist at S&P, stated that while the global economy is on track for a soft landing, geopolitical developments could impact this progress.
Regional Growth and Risks
The report forecasts a 4.3% annual real GDP growth rate in 2024 and 4.4% in 2025 for regions excluding China and Japan, driven by resilient domestic demand and accommodative monetary policies. The US Federal Reserve’s easing cycle has allowed central banks in the Philippines, New Zealand, Hong Kong SAR, and Indonesia to lower rates. However, geopolitical tensions remain a risk to economic progress.
Doubts Revealed
S&P Global Market Intelligence -: S&P Global Market Intelligence is a company that provides information and analysis about financial markets and economies around the world. They help people understand how economies are doing and what might happen in the future.
Economic Growth -: Economic growth means that a country’s economy is getting bigger and producing more goods and services. It’s like when a tree grows taller and has more leaves.
Public-sector investment -: Public-sector investment is when the government spends money on things like roads, schools, and hospitals. It’s like when your parents buy things for the house to make it better.
Inflation -: Inflation is when the prices of things we buy go up over time. It’s like when your favorite candy costs more than it did last year.
Monsoon -: Monsoon is a season in India when it rains a lot. This rain is important for growing crops and helps farmers.
Soft landing -: A soft landing is when an economy slows down gently without causing big problems like a recession. It’s like when a plane lands smoothly without a bump.
Monetary policies -: Monetary policies are actions taken by a country’s central bank to control the money supply and interest rates. It’s like when your parents decide how much pocket money you get.
Geopolitical risks -: Geopolitical risks are problems between countries that can affect the economy, like disagreements or conflicts. It’s like when two friends argue and it affects everyone in the group.
Accommodative monetary policies -: Accommodative monetary policies are when central banks make it easier to borrow money by lowering interest rates. It’s like when a shop has a sale and things are cheaper to buy.