India's GDP Growth At 7% In 2025

  • 31 May 2024

According to the RBI’s annual report released on May 30th, India’s economy is projected to grow by 7% in 2024-25. The Indian economy expanded at a robust pace in 2023-24, with real GDP growth accelerating to 7.6% from 7.0% in the previous year.

Key Points

  • The RBI highlighted risks to food inflation, stating that it remains vulnerable to supply-side shocks.
  • The RBI reported a gain of Rs 83,616 crore from foreign exchange transactions during the year and interest income from foreign securities rose to Rs 65,328 crore, enabling the RBI to increase the size of its contingency fund.
  • Consumption demand, particularly in rural areas, is expected to rise as headline inflation eases towards the targeted level.
  • The report indicated that easing supply chain pressures, broad-based softening in core inflation, and early signs of an above-normal southwest monsoon bode well for the inflation outlook in 2024-25.
  • The Indian economy will need to navigate challenges posed by the rapid adoption of AI/ML technologies and recurrent climate shocks.
  • Geopolitical tensions, global commodity price movements, erratic weather developments pose downside risks to growth outlook.
  • Regarding liabilities, the report emphasized the importance of diversifying deposit sources, as reliance on bulk deposits increases sensitivity to interest rate fluctuations