New York: India’s GDP growth is projected at 7.2 percent for 2024-25 and around 7 percent for the following fiscal year. After that, there is a strong likelihood that growth will revert to the 8 percent trend, according to Reserve Bank of India Deputy Governor Michael Debabrata Patra. He shared these insights during the New York Fed Central Banking Seminar, organized by the Federal Reserve Bank. Patra emphasized that “India’s time has come,” highlighting the country’s youthful demographic, with the youngest population in the world and a median age of 28 years. Unlike many other parts of the world, India’s working-age population is expanding, with every sixth working-age person being an Indian.
Patra noted that since India’s independence in 1947, the country’s growth trajectory has undergone three significant structural shifts, with trend growth rising to 7 percent between 2002 and 2019. Following the severe contraction during the COVID-19 pandemic, a new growth trajectory averaging 8 percent seems to be emerging between 2021 and 2024. As a result, India is now considered the fastest-growing major economy globally. Already the fifth-largest economy in terms of market exchange rates, India is on track to become the third-largest economy by 2030. The country also holds the position of the third-largest economy in terms of purchasing power parity.
“Our projections show that India’s real GDP growth will be 7.2 percent in 2024-25 and around 7.0 percent in 2025-26, reflecting a cyclical correction from the rebound following the pandemic. Thereafter, there is a strong likelihood that India’s growth will revert to the 8 percent trend,” Patra stated. Regarding inflation, he projected an average of 4.5 percent in 2024-25 and 4.1 percent in 2025-26. Consumer Price Index (CPI) based inflation fell below target during July-August but rose to 5.5 percent in September due to a rise in food prices and adverse base effects inherent in year-on-year measurements.
Patra further highlighted that price pressures are expected to persist in October and November before headline inflation aligns with the target from December 2024 and remains stable in 2025-26. He also underscored India’s emergence as a global leader in leveraging digital technologies for transformative change, positioning the country for a dynamic and innovative future.
