Deloitte updates India’s growth forecast to 7.6%-7.8%

New Delhi. Deloitte India predicts 6.6% GDP growth for FY24-25, boosted by growth in consumer spending, exports and investment. They revised the growth estimate for FY23-24 to 7.6-7.8%. The rise of the middle income class in India has led to increased purchasing power and demand for luxury goods. The firm estimates that by 2030/31, half of Indian households will be in the middle to upper income group, leading to further growth in consumer spending. Deloitte’s forecast is in line with the World Bank, although it is lower than the estimates of the RBI and other agencies.

With the global economy expected to improve in 2025, India is likely to benefit from improved capital inflows and export growth. Strong economic performance over the past two years, supported by government infrastructure spending, has helped India recover from the COVID-19 pandemic. However, concerns remain about inflation and geopolitical uncertainties affecting food and fuel prices. Despite this, an above-normal monsoon is expected to boost agricultural output and moderate food prices.

Deloitte suggests corrective measures to sustain household spending, including increasing employment opportunities in rural and semi-urban areas and investing in infrastructure and skill enhancement programs such as Future Skills Prime 2021 and Ayushman Bharat. India’s GDP grew 8.4% year-on-year in the October-December 2023 quarter, much higher than analysts’ expectations. PM Narendra Modi described this growth as proof of India’s economic strength and potential. Despite challenges such as inflation and geopolitical uncertainties, Deloitte’s outlook indicates positive economic growth for India, driven by various factors such as consumer spending, exports and investment.