India’s economy is expected to have shown signs of recovery in the last quarter of 2024, though potential trade risks may impact future growth.
Data scheduled for release on Friday is projected to show a gross domestic product (GDP) growth of 6.2% for the three-month period ending in December, based on a median estimate of economists surveyed by Bloomberg. This marks an improvement from the 5.4% growth recorded in the previous quarter but remains below the Reserve Bank of India’s (RBI) forecast of 6.8%.
The Indian government recently revised its GDP growth estimate for the fiscal year ending in March 2025 to 6.4%, reflecting the slowest pace since the COVID-19 pandemic. Growth for the following fiscal year is also expected to remain below 7%, compared to the 8% expansion recorded in the prior year.
Despite being one of the fastest-growing major economies, India’s growth rate remains below the 8% threshold that some economists suggest is necessary to achieve the government’s long-term goal of becoming a developed nation by 2047.
Factors contributing to last quarter’s growth include an increase in government spending and stronger rural consumption. However, external trade developments could introduce challenges. India is among the countries potentially affected by changes in U.S. trade policies, including tariff adjustments.
As global economic conditions evolve, analysts are closely monitoring how India navigates trade uncertainties while maintaining its economic momentum.
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