IMF projects global growth at 3.2% for 2024 and 3.3% for 2025, indicating moderate economic recovery.
Geopolitical risks, supply chain disruptions, and trade fragmentation continue to impact growth prospects.
Advanced economies (US, Eurozone) showing divergent growth patterns:
US resilient due to strong domestic demand.
Eurozone slowing due to high energy prices and weak manufacturing.
China’s economy slowing, affecting global trade flows.
GDP growth estimated at 6.4% for FY25, driven by agriculture and services sector growth.
Private consumption remains steady, with rural demand improving due to a record Kharif crop.
Manufacturing sector facing challenges, impacted by weak global demand and seasonal factors.
Macroeconomic stability maintained through fiscal discipline, strong external balance, and high remittances.
Key challenges: Global trade tensions, commodity price shocks, and external uncertainties.
Growth enablers: Structural reforms, private sector investment, and policy stability.
RBI maintained repo rate at 6.5%, balancing inflation control with economic growth.
Credit growth strong at 11.8% YoY, led by MSMEs, housing, and infrastructure.
Gross Non-Performing Assets (GNPAs) at 12-year low of 2.6%, indicating improved asset quality.
Banking sector robust, with Capital Adequacy Ratio (16.7%) above regulatory requirements.
Stock markets reaching all-time highs, driven by strong corporate earnings and FPI inflows.
Mutual fund industry expanding, with growing retail investor participation.
Regulatory concerns over rising consumer credit and NBFC lending risks.
Continued financial sector reforms to improve credit access and investor confidence.
Focus on fintech, digital banking, and financial inclusion to sustain long-term growth.
Total exports (goods + services) grew by 6% YoY, reaching USD 602.6 billion.
Services exports saw double-digit growth (11.6%), helping offset trade deficit.
Net Foreign Direct Investment (FDI) declined due to higher repatriation by foreign investors.
Forex reserves at USD 640.3 billion, providing financial stability.
Protectionism rising, affecting India’s access to global markets.
Non-Tariff Measures (NTMs) like Carbon Border Adjustment Mechanism (CBAM) impact exports.
Strengthen FTAs (UK, EU) to diversify trade partners.
Reduce dependence on Chinese imports through domestic manufacturing incentives.
Retail inflation moderated to 4.9% in FY25 but food inflation remained high at 8.4%.
Extreme weather events impacted vegetable and pulses prices (onions, tomatoes, tur dal).
Core inflation (excluding food & fuel) at its lowest in a decade, showing successful monetary policy.
Buffer stock management to stabilize prices of onions, tomatoes, and pulses.
Import relaxations and stock limits imposed to prevent hoarding.
Climate-resilient agriculture needed to reduce volatility in food prices.
Better storage, supply chains, and real-time price monitoring systems recommended.
India projected to reach USD 5 trillion by FY28 and USD 6.3 trillion by FY30.
Growth rate of 8% needed for ‘Viksit Bharat 2047’ vision.
Global economic fragmentation (rising protectionism, China’s dominance in manufacturing) impacting supply chains.
Regulatory burdens slowing industrial expansion.
Deregulation to improve ease of doing business.
Investment in clean energy and self-reliance in key manufacturing sectors.
Boosting digital transformation and AI integration.
Post-election increase in capital expenditure, boosting infrastructure growth.
Significant investments in railways, highways, airports, and digital connectivity.
Government incentivizing private sector participation in infrastructure financing.
DFIs playing a key role in long-term infrastructure financing.
PLI schemes boosting industrial output and job creation.
MSMEs facing challenges in credit access and high regulatory burdens.
Improve access to finance for MSMEs.
Enhance logistics and supply chain efficiencies.
Grew at 7.2%, led by IT, financial services, and logistics.
India emerging as a global hub for digital and fintech services.
Increased foreign investment in technology, AI, and automation services.
Crop diversification and sustainable farming gaining focus.
Climate change impacting agricultural output.
Expansion of irrigation, precision farming, and agri-tech adoption.
India’s push towards renewable energy and carbon neutrality.
Challenges in securing critical minerals for green energy transition.
Strengthening climate resilience and environmental regulations.
Skill development crucial for AI-driven job markets.
Need for flexible labor regulations and social security for gig workers.
Encouraging female entrepreneurship and workforce inclusion.
India’s economy remains resilient, driven by strong domestic demand.
Monetary and fiscal policies are ensuring financial stability.
India must navigate global trade barriers and invest in self-reliance.
Climate action and sustainability will shape India’s future economic policies.
