India on Steady Path to 6.5-7% GDP Growth Amid Global Uncertainties

India is projected to achieve a 6.5-7% GDP growth rate in FY25, thanks to strong macroeconomic stability, investment, and employment trends. However, global uncertainties and potential economic corrections pose risks. The finance ministry remains optimistic about the impact of government spending and improved agricultural conditions.

India is on track to achieve a GDP growth rate of 6.5-7% in the current financial year, a finance ministry report revealed. High-frequency indicators by August show strong macroeconomic stability, spurred by investment and employment trends.

Despite global economic uncertainties and potential policy rate cuts amid recession fears in advanced economies, the report maintains optimism. The foundation for this forecast is cemented on GDP growth of 6.7% in Q1 FY25, stable financial sector, and resilient external accounts, including robust foreign exchange reserves.

The finance ministry anticipates an increase in public expenditure, boosting growth and investment. Meanwhile, improved agricultural conditions with higher kharif acreage and adequate reservoir levels are expected to support rural income and demand. Though some sectors like automobile sales and FMCG show signs of strain, these may be temporary, cushioned by the festival season's demand surge.

(With inputs from agencies.)