Economists hail India's robust GDP growth projections by global financial institutions

New Delhi, Oct 23: Top economists on Wednesday hailed India's GDP projections from global financial institutions like the International Monetary Fund (IMF) and Deloitte, saying the surge in rural consumption was primarily driving the country's GDP growth story.

The International Monetary Fund (IMF) maintained its India growth rate projection at 7 per cent in the current fiscal year. According to Deloitte, India's annual GDP growth was projected to be between 7 and 7.2 per cent in FY 2024-2025, which was in line with the Reserve Bank of India's (RBI) prediction of the country witnessing real GDP growth at 7.2 per cent for FY25.

Sanju Verma, an economist and national spokesperson of the BJP, said that the average monthly income of rural households in India has increased by almost 58 per cent over five years as per the latest survey by the National Bank for Agriculture and Rural Development (NABARD), and that was amply evident from what the festival season sales numbers look like in rural areas.

"The purchasing power was certainly intact and a large chunk of the festival season sales were being driven by rural and semi-urban India, once again endorsing the fact that the rural growth story in India was firing on all cylinders," she emphasised. It was not just the GDP growth trajectory, which under the leadership of Prime Minister Narendra Modi, was slated to be intact but the moot point here was that while GDP growth was moving upwards, inflation was slated to move southwards.

The RBI's forecast for FY25 in terms of CPI inflation was retail inflation would stand at just 4.5 per cent, followed by an even lower 4.3 per cent in FY26. According to the IMF, India's headline inflation in FY25 will be just 4.4 per cent and even lower, at barely 4.1 per cent, in FY26. "So every global financial institution that matters was saying that while inflation will moderate substantially for India, going forward, GDP growth trajectory will be northward bound which was excellent news," Verma said.

The global GDP growth, as per the IMF, in CY 2024 was likely to be barely in the region of 3.2 per cent and for China, that number was 4.8 per cent, while the inflation in large parts of the western world was still pretty sticky. "Amid this backdrop, what India has managed to achieve in terms of the rural consumption story firing on all cylinders under PM Modi's visionary leadership was no mean achievement," said Verma.