India’s Economy Set For ‘Resilient Growth’ In 2025: S&P Global Ratings

New Delhi, Dec 11 (KNN) S&P Global Ratings projected on Tuesday that the Indian economy is poised for ‘resilient growth’ in 2025, with inflationary pressures expected to ease, leading to a ‘modest’ easing of monetary policy by the Reserve Bank of India (RBI).

The ratings agency maintained its growth forecast for the current fiscal year at 6.8 per cent, with an anticipated 6.9 per cent growth in 2025-26.

Vishrut Rana, Economist, S&P Global Ratings, highlighted that the Indian economy's resilience in 2025 will be driven by strong urban consumption, steady growth in the service sector, and continued investment in infrastructure.

Rana also noted that as inflationary pressures recede, the central bank is expected to modestly ease monetary policy in 2025.

Last week, the RBI kept the benchmark interest rate at 6.5 per cent to manage inflation but lowered the cash reserve ratio (CRR) by 50 basis points to inject liquidity into the system.

India’s economy grew by 8.2 per cent in 2023-24. However, S&P observed that GDP growth for the June-September 2024 quarter was weaker than expected, at 5.4 per cent.

Slower fiscal impulse, along with weaknesses in sectors like the urban middle class and manufacturing, created downside risks to the forecasted 6.8 per cent growth for the fiscal year 2025.

The report also pointed out challenges such as post-pandemic weaknesses in the public sector and household balance sheets, a competitive global manufacturing environment, and sluggish growth in the agriculture sector.

To support sustained economic growth, S&P emphasised the importance of creating enough jobs to accommodate India’s rising labour force participation, improving infrastructure and technology, and strengthening both public and household financial conditions.

(KNN Bureau)