India’s Economic Growth Forecast: Insights from S&P Global Market Intelligence
India’s economy is expected to grow steadily, with a forecasted average growth 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 such as easing inflation, favorable monsoon conditions, and increased government social spending are expected to boost household demand. Healthy corporate balance sheets are also supporting private investment recovery.
S&P Global Market Intelligence’s October Global Economic Forecast update highlights a steady global economic expansion, supported by policy stimulus. Ken Wattret, a global economist at S&P Global Market Intelligence, noted that the global economy is on track for a “soft landing” with moderating inflation and easing monetary policies. However, geopolitical developments could impact this expansion.
The report forecasts an annual real GDP growth rate of 4.3% 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, which began in September, is allowing for interest rate cuts in several countries, including the Philippines, New Zealand, Hong Kong SAR, and Indonesia.
While the global economic outlook remains positive, risks from geopolitical tensions persist. Nonetheless, policy measures and moderating inflation are paving the way for sustained economic growth.
Doubts Revealed
S&P Global Market Intelligence -: S&P Global Market Intelligence is a company that provides financial information and analysis. They help people understand how economies and markets are doing.
Economic Growth -: Economic growth means the increase in the amount of goods and services produced by a country. It shows how well a country’s economy is doing.
Public-sector investment -: Public-sector investment is when the government spends money on projects like building roads, schools, and hospitals. It helps improve the country’s infrastructure.
Inflation -: Inflation is when the prices of things we buy go up over time. It means you need more money to buy the same things.
Monsoons -: Monsoons are seasonal rains that are very important for farming in India. Good monsoons mean more water for crops, which helps farmers grow more food.
Soft landing -: A soft landing is when an economy slows down just a little bit instead of crashing. It means the economy is adjusting smoothly without big problems.
Geopolitical risks -: Geopolitical risks are problems between countries that can affect the economy. For example, wars or trade disputes can make it harder for countries to do business with each other.
US Federal Reserve -: The US Federal Reserve is like a big bank for the United States. It helps control the country’s money supply and interest rates to keep the economy stable.
Easing cycle -: An easing cycle is when a central bank, like the US Federal Reserve, lowers interest rates to make borrowing money cheaper. This helps encourage people and businesses to spend more.