FICCI Updates India’s Economic Growth Forecast for FY 2024-25

The Federation of Indian Chambers of Commerce and Industry (FICCI) has revised its economic forecast for India, projecting a GDP growth rate of 6.4% and a Consumer Price Index (CPI)-based inflation rate of 4.8% for the fiscal year 2024-25. This adjustment reflects a more cautious outlook due to global uncertainties and domestic challenges.

GDP Growth Forecast
According to FICCI’s latest Economic Outlook Survey conducted in December 2024, India’s GDP growth projection has been downgraded to 6.4% for FY 2024-25, down from the 7.0% estimated in September 2024. This also marks a slowdown compared to the 8.2% growth recorded in FY 2023-24. The decline is attributed to global uncertainties and domestic challenges that have affected economic momentum.

Sectoral Growth Expectations

• Agriculture: The agricultural sector, including allied activities, is expected to grow by 3.6% in FY 2024-25, which is likely to boost rural consumption and sentiment in the first half of the fiscal year.
• Industry and Services: The industrial sector is projected to grow by 6.3%, while the services sector is expected to expand by 7.3%. Economic activity is forecasted to pick up in the latter half of the year, supported by a revival in public capital expenditure, festive demand, and recovery in industrial activity post-monsoon.

Inflation Outlook
FICCI anticipates CPI-based inflation to be 4.8% for FY 2024-25, aligning with the Reserve Bank of India’s target. This decrease in inflation is expected to ease the pressure on consumers, particularly regarding food prices, which have impacted household budgets over the past year.

Investment and Consumption Dynamics
Government-driven investments in infrastructure, housing, and logistics are expected to support growth. However, private capital expenditure is anticipated to remain weak due to global geopolitical uncertainties and uneven domestic demand. Consumer spending is expected to improve, fueled by a positive outlook for agriculture and potential monetary easing by the RBI, which could result in lower interest rates.

Emerging Opportunities
The report highlights opportunities in sectors such as manufacturing, electronics, and pharmaceuticals, as global supply chains shift away from China. Economists stress the need for targeted policies to attract foreign direct investment and enhance India’s manufacturing competitiveness.

Global Economic Context
While the global economy has shown resilience, growth prospects remain uneven across regions. Softening price levels and monetary policy easing in major economies are expected to support global growth, but risks such as rising geopolitical tensions and trade policy uncertainty continue to pose challenges.

Policy Recommendations
Ahead of the Union Budget for 2025-26, economists recommend measures to boost private consumption, including reviewing the current tax structure to enhance disposable income and stimulate spending. Continued investments in welfare programs and infrastructure are also urged to sustain economic momentum.