Indian economy to touch $7 trillion mark by 2031
New Delhi, Nov 15 (IANS) The Indian economy is expected to clock a medium-term growth of 6.7 per cent on average between fiscal 2025 and 2031, and touch the $7 trillion mark, according to a report by rating agency CRISIL. This would be similar to the 6.6 per cent growth seen in the pre-pandemic decade, driven by a capex push and surge in productivity. The report projects India's Gross Domestic Product (GDP) growth at 6.8 per cent during the current financial year as high interest rates and stricter lending norms are expected to impact urban demand.
"A somewhat lower fiscal impulse to growth (as the Central government pursues fiscal consolidation) should also weigh on growth," the ET-Crisil India Progress Report states. Inflation based on the Consumer Price Index (CPI) is likely to ease to 4.5 per cent on average in 2024-25 from 5.4 per cent in the previous year, driven by lower food inflation. However, the report sees weather conditions and geopolitical uncertainties as key risks to its growth and inflation forecasts. "Although kharif sowing is higher this year, the impact of excess and unseasonal rains needs to be ascertained. An adverse weather event through the rest of this fiscal remains a constant risk to food inflation and agriculture income," the report states.
According to the report, "any further escalation in geopolitical tensions could constrain supply chains, disturb trade and push up oil prices, impacting inflation and sending input costs soaring." The report forecasts India's current account deficit to remain in the safe zone on the back of robust services export and healthy remittance inflows although it is expected to rise to 1 per cent of GDP during 2024-25 compared to 0.7 per cent in 2023-24. Meanwhile, the latest data released by the Commerce and Industry Ministry show that India’s merchandise exports jumped by a robust 17.25 per cent to USD 39.20 billion during October this year, as compared to USD 33.43 billion during the same month last year.
The double-digit growth in exports amid the slowdown in global trade was driven by engineering goods, electronic goods, organic and inorganic chemicals and textiles which reflects the growing strength of India’s manufacturing sector. India’s total exports (merchandise and services combined) for October 2024 are estimated at USD 73.21 billion, registering a growth of 19.08 percent vis-à-vis October 2023. Total imports (merchandise and services combined) for October 2024 is estimated at USD 83.33 Billion, registering a positive growth of 7.77 per cent vis-à-vis October 2023.
