India Projects 6.5% Growth in FY 2024/25 Amid Global Uncertainties

Investing.com -- The Indian government announced on Thursday that the country's economic growth is projected to be approximately 6.5% for the fiscal year 2024/25. This estimate is closer to the lower end of the previous projection range of 6.5%-7%. The government highlighted global uncertainties as a potential risk to domestic economic growth.

The Finance Ministry's economic report for November indicated a promising growth outlook for the October-December period. This positive outlook is attributed to resilient rural demand and an increase in urban demand during the first two months of the quarter.

However, India's economic growth showed a slower pace than expected during the July-September period. This slowdown was primarily driven by weaker expansion in the manufacturing and consumption sectors. Despite these challenges, India maintained its stance on achieving a growth rate of 6.5%-7%, which is considered a record-breaking pace globally even in a tough environment.

The report also noted that the growth outlook for the October-March period is expected to be better compared to the first six months of the fiscal year.

Additionally, the report stated, "The combination of the central bank's monetary policy stance and macroprudential measures may have contributed to the slowdown in demand."

The Indian central bank has kept interest rates unchanged in eleven consecutive policy meetings. While the country is grappling with high inflation, this decision was maintained despite calls for rate cuts to support growth.