S&P Global Market Intelligence revises India’s FY25 growth upwards to 6.8%, ET Infra

India’s economy will likely grow 6.8% in FY25, up from 6.5% projected earlier, on the back of stronger growth momentum and improving global prospects, S&P Global Market Intelligence said Tuesday.

“We have revised up 2024’s growth forecast for India due to stronger than expected momentum at the start of the year. An improving global economic environment and an expected gradual easing of domestic financial conditions will support economic activity,” said Ken Wattret, global economist, S&P Global Market Intelligence.

The global analytics firm also raised India’s FY24 forecast upward to 7.3% from 6.9% projected earlier.

The government expects the economy to grow 7.6% in FY24. India’s growth numbers released last month showed that the economy expanded 8.2% in the year’s first three quarters.

“The latest GDP data indicate stronger than expected growth during the first three quarters of fiscal year 2023, led by government infrastructure spending,” said Wattret.

However, S&P Global Market Intelligence noted that lower public infrastructure spending was likely to ease growth in FY25. The Indian economy is likely to grow 6.1% in FY26 and 6.2% in FY27.

In its interim budget, the central government set a capex target of Rs 11.1 lakh crore for this fiscal year, up 16.9% from revised estimates, lower than the 28.4% growth witnessed in FY24.

On the inflation front, the analytics firm was also more optimistic as it projected inflation to decline to 5.1% in FY25 from 5.6% earlier. India’s inflation is likely to average 5.7% in FY24.

Experts are pencilling in a rate cut either in June or August policy meeting.

S&P Global Market Intelligence also lowered the FY26 inflation estimate to 4.9% from 5.15 projected in February.

The global analytics firm also revised global growth projections to 2.6%, up 0.3 percentage points from earlier projections, on the back of revisions to US, UK and India’s growth numbers.

“The revisions chime with cautiously optimistic signals emanating from the PMI data compiled by S&P Global in recent months, including for the struggling manufacturing sector,” it said.