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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, Dr. Rumki Majumdar, Economist, Deloitte India.
‘’India will likely see improved capital flows and a rebound in exports,’‘ Dr. Majumdar predicted..
Analysing changed market conditions, Deloitte has revised India’s annual economic growth prediction to 7.6% to 7.8%. The consulting firm also estimated the country’s GDP growth to be around 6.6% in FY 2024-25 and 6.75% in the current fiscal as markets learn to factor in geopolitical uncertainties in their investment and consumption decisions Dr. Majumdar further said 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. “We are also seeing the difference between actual GDP from the pre-COVID GDP levels progressively narrowing as growth picks up pace,’‘ the economist observed.
However, Dr. Majumdar said, there were concerns about inflation and geopolitical uncertainties feeding into higher food and fuel prices. At the same time, the prediction of above normal monsoon would likely provide some respite by positively impacting agriculture output and easing pressure on food prices. ‘‘Inflation is expected to remain above the Reserve Bank of India’s target level of 4% over the forecast period due to strong economic activity,’‘ she further noted,
According to Deloitte’s Quarterly ‘India Economic Outlook released on Friday, the firms’ expectations for the near-term future remain in line with the previous forecasts with a slight change in the forecast range due to a higher base effect in FY 2023-24.
