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March 22, 2024

India’s Economic Momentum Strong: Finance Ministry Projects Positive Outlook for Next Fiscal Year

India’s Economic Prospects Shine Bright: Finance Ministry Forecasts Optimistic Outlook for Next Fiscal Year

The Finance Ministry announced on Friday a buoyant outlook for India’s economic landscape in the forthcoming fiscal year, citing a surge in private investment and a downward trajectory in inflation. In its Monthly Economic Review, the ministry underscored the positive indicators, highlighting the inclusion of Indian bonds in the Bloomberg bond index, set to commence in January 2025, as a pivotal factor expected to bolster capital inflows.

Emphasizing the vitality of investment activities, the review noted a robust growth trajectory propelled by a concomitant increase in consumption. The Department of Economic Affairs’ February edition of the review noted, “The continued emphasis on public investment appears to have catalyzed private investment, amplifying the growth momentum.”

Revised estimates from the National Statistical Office (NSO) upwardly adjusted the GDP growth forecast for the current fiscal to 7.6 per cent, surpassing the previous projection of 7.3 per cent. India’s sustained growth, surpassing 8 per cent for three consecutive quarters, reaffirms its resilience amidst a global economic slowdown. Echoing this sentiment, several agencies have revised their FY24 growth estimates for India, approaching 8 per cent, according to the ministry.

The review anticipates a promising outlook as India enters the fiscal year 2025. It notes a surge in demand for residential properties in tier-2 and tier-3 cities, which bodes well for the construction sector’s expansion. Moreover, the revival of non-farm employment signals an enhanced capacity to absorb labor transitioning from agriculture. Anticipating a notable upturn in manufacturing sector employment, the review predicts the emergence of sunrise sectors as catalysts for generating high-quality employment opportunities.

Despite challenges such as potential spikes in crude oil prices and global supply chain disruptions, the overall sentiment remains upbeat. The review underscores India’s resilience, projecting a bright outlook for FY25.

In terms of inflation, the outlook remains positive for the upcoming months. Core inflation is on a downward trajectory, indicative of a widespread moderation in price pressures. Additionally, the anticipated increase in summer sowing is expected to alleviate food prices, contributing to overall stability.

In conclusion, with a robust growth trajectory, stable inflation, and promising employment prospects, India’s economy is poised to conclude the current fiscal year on a positive note. The Finance Ministry’s Monthly Economic Review paints a promising picture, forecasting a resilient and prosperous path ahead for the Indian economy.

Jhumpa Lahiri

Jhumpa Lahiri

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