Indian economy to grow at 5.4% in FY25: Motilal Oswal

The Indian economy is projected to grow at 5.4 per cent in 2024-2025, riding on the back of robust growth of 7.6 per cent in the second quarter of the current fiscal, Motilal Oswal said today. 

“Not only India but also the US economy has proven to be much more resilient. It is therefore no surprise that we have to revise our growth forecasts upwards yet again in this version of the Quarterly Economic Outlook (QEO),” the brokerage report stated. 

The brokerage upgraded India’s real GDP growth from 6 per cent in September 2023 to 6.7 per cent now for FY24. 

According to the report, for FY25, the estimate for nominal GDP is kept unchanged at 5.4 per cent, assuming a broad-based slowdown. “Further, nominal GDP growth forecast is also revised upwards to 8.2 per cent for FY24 and 10.1 per cent for FY25 from 7.8 per cent in FY24 and 9.9 per cent in FY25,” the report mentioned. 

On the inflation front, Motilal Oswal kept the CPI estimate unchanged at 5.6 per cent and revise it down to 5.0 per cent from 5.3 per cent earlier for FY25. Further, while the RBI expects CPI inflation to moderate to 4.0 per cent by 2QFY25, this will be due to the base effect and hence temporary. 

As in the last two years, government receipts could exceed budget estimates (BEs) again this year, by about Rs 1 trillion.  “If so, it will allow the government to spend an additional amount of up to Rs 650 billion and still meet its deficit target of 5.9 per cent of GDP. This target, we believe, would be achieved, "the brokerage added further.