India's Economic Outlook: Navigating Geopolitical Headwinds and Inflation Challenges

India, set to be the world's fastest-growing major economy in 2025, faces challenges in geopolitical tensions, inflation, and private sector investment. Experts highlight the recovery in economic growth backed by strong domestic demand, while potential interest rate cuts and fiscal policies could play crucial roles in steering the economy forward.

As India positions itself for a promising 2025 economic outlook, challenges like geopolitical tensions and domestic inflation loom large. Economists report signs of recovery driven by increased rural demand and festive activities, though recent dip in growth is noted as a temporary setback.

The Reserve Bank of India, facing a delicate balance between growth and inflation, is expected to deliberate potential interest cuts under its new Governor, Sanjay Malhotra, in February. This comes in the context of the upcoming Union Budget, which will chart Modi 3.0's fiscal path amid global uncertainties.

Solid macroeconomic fundamentals bolster experts' optimism, projecting real GDP to rise by 6.6% for 2024-25, with growth reaching over 7% thereafter. While foreseeing structural growth drivers to sustain, the government stresses on fiscal prudence and quality public spending to ensure economic stability.

(With inputs from agencies.)