Key Points
Sustained government capex, softness in global commodity prices, and green shoots in the private corporate capex cycle will help the Indian economy grow 6.5% in FY25, lower than the 6.9% projected for this fiscal year despite global headwinds, India Ratings and Research said Thursday...
Despite the base effect, the sequential GDP growth indicates that the economic recovery is on track due to the sustained government capex, healthy corporate performance, deleveraged corporates/banking sector balance sheet, continued softness in global commodity prices, and the prospect of a new private corporate capex cycle, the rating agency noted...
Ind-Ras forecast aligns with the IMFs 6.5% projection for the coming year but is lower than RBIs estimate of 7%...
The rating agency upped its FY24 forecast to 6.9% from 6.7% projected earlier, as it noted that a build-up in the economy owing to prevailing weather conditions in the North would push agriculture and consumption demand...
If monsoon remains normal in 2024 and there are no adverse weather/ geopolitical events, then the RBI may resort to monetary easing in 2HFY25, it said.. While the agency pointed to service recovery as a positive, especially in new sunrise sectors like global capability centres and fintech, it pointed out that monsoon and industrial growth could remain areas of concern...
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