On November 21, 2024, the Reserve Bank of India (RBI) released its November bulletin, indicating that the weakness in the Indian economy observed in the second quarter of FY25 is behind us, with private consumption now driving demand [39c02dde]. The Indian economy grew by 6.7% in Q1 FY25, which fell short of the RBI's forecast of 7.1% [39c02dde]. The GDP data for Q2 is anticipated to be published on November 29, 2024, which will provide further clarity on the economic performance during this period [39c02dde].
ICRA had projected earlier that India’s real GDP growth for the September quarter of FY25 would slip to 6.5%, mainly due to heavy rains affecting agricultural output and weaker corporate performance [12f583af]. However, ICRA maintained its overall growth estimate for FY25 at 7%, consistent with the RBI's forecast of 7.2% for the fiscal year [12f583af].
Moody's Ratings, on November 18, 2024, also forecasted a GDP growth rate of 7.2% for 2024, citing a rebound in household consumption and moderating inflation as key factors driving this positive outlook [346e7bf8]. The report emphasized strong festival season demand and rural spending, which are expected to bolster consumption despite inflation risks stemming from geopolitical tensions and extreme weather events [346e7bf8].
The RBI's bulletin highlighted that festival spending has significantly boosted real activity in Q3, with e-commerce thriving, particularly in rural areas, supported by increased kharif output [39c02dde]. The RBI projects India's GDP growth for 2024-25 at 7.2%, while the International Monetary Fund (IMF) and World Bank estimate it at 7.0% [39c02dde]. The Economic Survey has projected a more conservative growth range of 6.5-7% for the fiscal year [39c02dde]. As India navigates these challenges, the interplay between growth and inflation will be critical in shaping its economic future, particularly as the country aims to enhance public investment and foster private sector growth [f0a1093b].