India Forecasts Growth Exceeding 7% for FY25, States Chief Economic Adviser
The Chief Economic Adviser, V Anantha Nageswaran, has projected that India’s economy will expand by more than 7% in the current fiscal year. Additionally, he anticipates sustained growth of more than 6.5%-7% over the next decade, attributing it to investments in both physical and digital infrastructure.
Addressing concerns about inflation, Nageswaran stated that India is not expected to witness any significant upward spikes. While acknowledging the potential for unforeseen geopolitical events to impact inflation, he emphasized a baseline scenario where inflation gradually converges to the mid-point of the target range.
The Reserve Bank of India (RBI) has highlighted potential inflation risks stemming from extreme weather events and prolonged geopolitical tensions, which could lead to volatile crude oil prices.
During an event hosted by the National Council of Applied Economic Research, Nageswaran expressed optimism about India’s economic trajectory, stating that favorable conditions exist for maintaining a steady growth rate.
Regarding monetary policy, Nageswaran emphasized the mandate of the Indian monetary policy committee to keep inflation within a target range of 2% to 6%. The RBI aims to stabilize inflation at 4% before considering rate cuts.
Nageswaran emphasized the potential for India to achieve “non-inflationary” growth, indicating a favorable economic outlook.
Recent analysis by the RBI suggests conditions are conducive for sustained growth in real GDP, which has averaged over 8% between 2021 and 2024.
Meanwhile, RBI Deputy Governor Michael Patra has suggested that India could achieve a growth rate of 10% over the next decade, potentially becoming the second-largest economy by 2032 and the largest by 2050. The RBI’s monetary policy committee, in its April 6 meeting, maintained projections for real GDP growth at 7% and consumer price-based inflation at 4.5% for FY25.
