New Delhi, Apr 27: Deloitte India on Friday said it estimates India’s GDP growth at 6.6 per cent in the current fiscal helped by consumption expenditure, exports rebound and capital flows.In its India’s economic outlook report, Deloitte said the rapid growth of the middle-income class has led to rising purchasing power and even created demand for premium luxury products and services.
With the expectation that the number of middle-to-high-income segments will be one in two households by 2030/31, up from one in four currently, we believe this trend will likely become further amplified, driving overall private consumer expenditure growth, it said.
Deloitte has revised India’s economic growth prediction for last fiscal to a range of 7.6 to 7.8 per cent. In January, the firm had projected growth for 2023-24 fiscal in the range of 6.9-7.2 per cent.
The country’s GDP growth is estimated to reach around 6.6 per cent in FY 2024-25 and 6.75 per cent in the year after, as markets learn to factor in geopolitical uncertainties in their investment and consumption decisions, Deloitte said in its quarterly update to its economic outlook.
“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. India will likely see improved capital flows and a rebound in exports” said Deloitte India Economist Rumki Majumdar.
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, she added.
That said, there are concerns about inflation and geopolitical uncertainties feeding into higher food and fuel prices. At the same time, the prediction of above normal monsoon will 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 per cent over the forecast period due to strong economic activity, Majumdar said.
Deloitte’s FY25 GDP growth estimate is similar to the projections made by the World Bank. It is, however, lower than the projections by the RBI and other agencies. The RBI has projected the Indian economy growth at 7 per cent in the current fiscal.