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Updated 22:26 IST, February 3rd 2025

India’s GDP Likely To Expand At 6.5%, Slightly Better Than...: CRISIL Report

India’s GDP is likely to expand at 6.5% in the upcoming fiscal year 2025-26, slightly better than the 6.4% growth projected for the current fiscal year, FY25.

Reported by: Business Desk
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India’s GDP Likely To Expand At 6.5%, Slightly Better Than...: CRISIL Report | Image: Unsplash

India’s GDP is likely to expand at 6.5% in the upcoming fiscal year 2025-26, slightly better than the 6.4% growth projected for the current fiscal year, FY25 - a CRISIL report said on Monday. 


This adjustment in outlook comes amid a recent slowdown in India’s economic expansion, which has been visible in the growth reports for the last few quarters - the report was quoted as saying by news agency ANI. Despite these challenges, CRISIL’s analysis suggests that the Indian economy is poised to grow, assuming there are no global shocks or significant climate crises. 

Inflation Relief & RBI Rate Cuts


This optimism is driven by factors such as tax relief, lower inflation, and expected rate cuts by the Reserve Bank of India (RBI). While the Indian economy is set to moderate to a 6.4% growth rate in FY25, the report highlighted several factors that could bolster future growth, including inflation ease and expected RBI rate cuts. 
The growth outlook is also depend on favorable monsoon conditions and lower crude oil prices. Government efforts to support the economy through continued fiscal expansion remain key - the report said.  However, CRISIL noted that private sector investment needs to accelerate to sustain long-term overall growth. 


The report also highlighted some potential challenges, particularly the impact of US trade policies under President Trump’s administration. A possible tariff hike could impact India's growth plans. In terms of inflation, the Consumer Price Index (CPI) is expected to ease from 4.7% in FY25 to 4.4% in FY26, assuming normal monsoon conditions and no unexpected hikes in global commodity prices. 

CAD Might Widen


Additionally, the fiscal deficit is projected to shrink further to 4.4% of GDP from 5.6% in FY24 and 4.8% in FY25. Achieving this will require prudent revenue spending and strong capital expenditure. However, India is likely to face challenges in its current account deficit, which is expected to widen from 1.0% of GDP in FY25 to 1.3% in FY26 due to export hurdles rising from US trade policies. 

(With ANI Inputs)
 

Published 22:08 IST, February 3rd 2025