India Ratings pegs FY25 GDP growth at 6.5%, says signs ‘bullish’ for private capex.
India’s GDP is expected to grow by 6.5 percent in 2024-25, according to India Ratings and Research. While this would represent a decline from the statistics ministry’s first advance estimate of 7.3 percent for the current financial year, the prospect of the private investment cycle bodes well for the economy.
Private corporate sector investment has been down and out for nearly a decade,” said Sunil Kumar Sinha, principal economist at India Ratings, on February 22.
But when we look at lead indicators, all of them are indicating that at the current juncture the private corporate sector is once again becoming more bullish about investments. It may or may not be happening on the ground in the way we would like it to, but some flavour of that has already started becoming clearer at least in terms of intentions and the way they (corporates) are now approaching banks to finance their projects,” Sinha added.
According to India Ratings, Rs 3.53 lakh crore was raised in 2022-23 to finance a total of 982 large projects – those of over Rs 1,000 crore. This is significantly higher than the Rs 1.98 lakh crore raised to finance 791 such projects in 2021-22.
With demand picking up, capacity utilisation in the private sector should start rising from the current aggregate level of 75 percent.
In terms of inflation, India Ratings’ forecast is broadly in line with that of the Reserve Bank of India, with Consumer Price Index (CPI) inflation seen at 5.0 percent in the first quarter of 2024-25 before easing to 4.1 percent in July-September.
