India’s Economic Growth Outlook Stable Despite Global Uncertainties

India’s economic growth outlook remains stable despite global uncertainties, according to a recent report by Boston Consulting Group (BCG). The report suggests that strong domestic factors such as consumption, government infrastructure spending, and a robust services sector continue to bolster economic resilience.

While external risks like geopolitical tensions and a global economic slowdown could present challenges, India’s economy appears poised for steady growth.

GDP Growth Projections Remain Within Expectations

For the financial year 2024-25, India’s GDP growth is expected to remain between 6% and 7% year-on-year (YoY). The BCG report noted that most economic growth forecasts were either retained or slightly revised during January and February 2025, reflecting continued confidence in the country’s economic trajectory.

Several major institutions have updated their projections. Nomura, for example, lowered its GDP growth forecast to 6.0%, marking a downward revision. Conversely, the Federation of Indian Chambers of Commerce and Industry (FICCI) maintained its projection at 6.4%, while the International Monetary Fund (IMF) kept its estimate unchanged at 6.5%.

Also Read: Indian Economy Shows Positive Signs Despite Global Headwinds

The Organisation for Economic Co-operation and Development (OECD) increased its forecast to 6.8%, reflecting optimism about India’s growth. Moody’s retained the most optimistic outlook, maintaining its projection of 7.0%.

Key Economic Indicators To Watch In The Coming Months

While GDP growth projections remain largely steady, policymakers and industry stakeholders will closely monitor key economic indicators in the coming months. These indicators will help assess whether any shifts occur in the country’s growth momentum, especially in light of potential external disruptions.

The report also highlighted some mixed signals in India’s labor market. Urban employment rates saw a decline, while rural employment experienced a slight uptick in January 2025.

This led to a marginal drop in overall employment. On a more positive note, both MGNREGA work demand and employment provision edged up, reaching a seven-month high.

Inflation trends also showed signs of easing. Wholesale Price Index (WPI) inflation dropped slightly in January 2025 compared to December 2024, driven by lower food price inflation and continued deflation in fuel and power prices.

Consumer Price Index (CPI) inflation similarly dipped to a five-month low in January 2025, as food price inflation eased and energy costs declined.

GST Collections And Trade Deficits Show Diverging Economic Trends

GST collections saw a significant surge, primarily driven by a jump in revenue from imports compared to the previous year. However, the Future Expectations Index (FEI) and the Current Situation Index (CSI) both weakened, reflecting subdued sentiment across most survey parameters, with the exception of price levels.

On the trade front, the merchandise trade deficit widened to USD 23 billion in January 2025, driven by a sharp decline in petroleum product exports. In contrast, the services trade surplus hit a record high, buoyed by a significant rise in services exports.

Conclusion: A Balanced Outlook With External Risks

India’s economic outlook remains stable for now, underpinned by strong domestic factors and a solid growth trajectory. However, external risks, particularly geopolitical tensions and a global economic slowdown, could challenge this stability.

As the country continues to navigate these uncertainties, monitoring key economic indicators will be essential to assess any potential shifts in its growth path.