India’s economy is set to expand significantly, with a forecasted growth rate of 6.9% in 2024 and 6.6% in 2025. This robust growth primarily stems from strong public investment and resilient private consumption, according to the World Economic Situation and Prospects as of mid-2024 released.
Despite subdued external demand impacting merchandise exports, sectors such as pharmaceuticals and chemicals are expected to see strong export growth.
SOUTH ASIA’S ECONOMIC OUTLOOK
South Asia’s economic outlook remains strong, buoyed by India’s robust performance and a slight recovery in Pakistan and Sri Lanka. The region benefits significantly from India’s dynamic economic activities, which play a crucial role in driving overall growth.
INFLATION AND MONETARY POLICY
Consumer price inflation in India is projected to decrease from 5.6% in 2023 to 4.5% in 2024. This rate stays comfortably within the central bank’s medium-term target range of 2 to 6%, providing a stable economic environment conducive to sustained growth.
DOMESTIC AND EXTERNAL DEMAND
India experiences robust domestic and external demand, which fuels its economic progress. The country’s improved labour market indicators reflect this growth, with higher labour force participation contributing to a thriving economy.
GOVERNMENT INITIATIVES AND FISCAL POLICIES
India’s government remains committed to reducing the fiscal deficit gradually while increasing capital investment. This balanced approach ensures sustainable economic growth and development, reinforcing the country’s economic stability and future prospects.