 "Deloitte India pegs FY25 GDP growth at 6.6%, raises FY24 prediction")
On the back of rising consumption expenditure, India's gross domestic product (GDP) is likely to grow at 6.6 per cent in the current year 2024-25 (FY25), Deloitte India said on Friday.
In its quarterly India's Economic Outlook report, Deloitte India also raised the FY24 GDP growth prediction to 7.6-7.8 per cent from 6.9-7.2 per cent in its January report.
The consultancy said that the rapid growth of the middle-income class in India has led to rising purchasing power and created demand for premium luxury products and services.
Even as growth in consumer spending post-pandemic has been fluctuating, there is a visible shift in consumption patterns, with demand for luxury and high-end products and services growing faster than demand for basic goods.
"With the expectation that the number of middle- to high-income segment will be one in two households by 2030/31, up from one in four currently, we believe this trend will likely become further amplified, driving overall private consumer expenditure growth," it said.
According to Rumki Majumdar, economist at Deloitte India, the difference between actual GDP and the pre-Covid GDP has been "progressively narrowing" as growth picks up pace.
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"Strong growth numbers over the past two years have helped the economy to catch up with the pre-COVID trends. Investment, backed by strong government spending on infrastructure, has helped India maintain a steady recovery momentum," Majumdar said.
The consultancy, however, added that inflation is expected to remain above the Reserve Bank of India's target level of 4 per cent over the forecast period due to strong economic activity.
For FY26, Deloitte has predicted India's GDP to grow at 6.75 per cent on the back of rate cuts.
"The global economy is expected to witness a synchronous rebound in 2025 as major election uncertainties get sorted out and the central banks of the West may announce a couple of rate cuts later in 2024. India will likely see improved capital flows and a rebound in exports," Majumdar added.
The development comes just days after the International Monetary Fund (IMF) raised India's growth forecast for FY25 to 6.8 per cent from 6.5 per cent on the back of strong domestic demand and a rising working-age population.
In April, the World Bank had upgraded India's FY25 GDP growth forecast to 6.6 per cent from 6.4 per cent earlier.
Deloitte's predictions are, however, lower than the projections by the Reserve Bank of India, which expects the Indian economy to grow 7 per cent in FY25.
| FY25 GDP projections | ||
| Agency | FY25 GDP growth forecast | |
| Deloitte India | 6.60% | |
| World Bank | 6.60% | |
| IMF | 6.80% | |
| S&P Global Ratings | 6.80% | |
| ADB | 7% | |
| Fitch | 7% | |
| RBI | 7% | |
| PHDCCI | 8-8.3% |