New Delhi [India], December 22 : Financial advisory services firm HDFC Securities expects India's GDP to grow at 6.4 per cent in 2024-25, with downside risks given a slowdown in urban demand and a lack of substantial revival in private capex.
Growing rural demand and an anticipated increase in government spendings are however key growth levers.
The Reserve Bank in its latest monetary policy had cut India's growth forecast to 6.6 per cent from 7.2 per cent.
The revision came after the economy grew by 5.4 per cent in real terms in the July-September quarter of the current financial year 2024-25. The quarterly growth was quite lower than RBI's forecast of 7 per cent.
For 2025-26, HDFC Securities said that GDP is estimated to improve to 6.7 per cent, HDFC Securities said in its 'The Big Review 2024'.
Reflecting on India's macro-economic environment, the report said that investments will continue to drive growth and rural consumption is better placed than urban.
Urban consumption is witnessing a slowdown as persistent inflation is dampening purchasing power of urban poor. High-ticket discretionary consumption is relatively better placed than staples, the report said.
Curb imposed on unsecured retail lending is also impacting credit backed consumption (mobiles, e-commerce), it asserted.
Rural consumption is witnessing a gradual revival led by a favourable monsoon, adequate kharif crops and reservoir levels. Moderation in MNREGA demand indicates positivity in the labour market.
Dhiraj Relli, MD and CEO, HDFC Securities, commented on the report, stating "India will largely be an outlier in the GDP growth compared to its global counterparts. We anticipate the growth for FY 26 to be volume-led, with BFSI, industrials, cement, energy and IT sectors being the engine drivers."
On the capital expenditure front, the report said that the central government capex has been muted in the first half 2024-25, but the same is expected to catch up in the second half.
The Economic Survey tabled in Parliament earlier this year "conservatively" projected India's real GDP growth at 6.5-7 per cent for 2024-25, acknowledging that market expectations are higher. Real GDP growth is the reported economic growth adjusted for inflation.
India's GDP grew by an impressive 8.2 per cent during the financial year 2023-24, continuing to be the fastest-growing major economy. The economy grew by 7.2 per cent in 2022-23 and 8.7 per cent in 2021-22.
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