Post by : Badri Ariffin

India’s economy is gathering speed once again. A fresh poll shows that the country’s growth this fiscal year is likely to outpace earlier projections, thanks to a surprisingly strong start and festive-season stimulus.

Economists have raised their forecasts for the second month in a row after data showed a robust 7.8% GDP expansion in the April–June quarter—well above expectations. The median forecast from over 40 economists now pegs growth at 6.7% for FY2025, up slightly from last month’s 6.6% estimate and significantly higher than the 6.3% projection made in August.

The upward revision comes as the government’s Goods and Services Tax (GST) cuts, introduced ahead of the festive season, are expected to lift household spending and retail demand. Combined with easing inflation and a steady rural rebound, the domestic economy appears to be holding its ground against global headwinds.

However, not all clouds have cleared. The 50% tariff still levied by the United States on Indian goods remains a key challenge, curbing export momentum. Still, improving diplomatic signals between Washington and New Delhi have stirred optimism that the trade strain could soon ease.

On the monetary front, a majority of economists—68% of those polled—expect the Reserve Bank of India (RBI) to cut rates by 25 basis points in December, after maintaining the repo rate at 5.50% earlier this month. This move is seen as a cautious step to support growth while inflation stays under control, projected to average 2.5% this year before rising modestly next year.

Even with policy support and consumer strength, questions linger around private investment, long seen as the backbone of sustainable job creation. Businesses have been slow to commit fresh capital amid global uncertainty and shifting trade dynamics.

For now, though, the tone is upbeat. The momentum from early-year growth and festive spending could carry India through the remainder of the fiscal year with resilience—solidifying its place as the world’s fastest-growing major economy.

#News, #Economic