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The elevation of income within the middle-income bracket has led to heightened purchasing power and an increased desire for luxury goods, even after the consumer pattern shift, this fluctuation will have an impact
Deloitte India’s projection for India’s GDP growth for the FY24-25 stands at 6.6 %. This optimistic outlook is attributed to several key factors outlined in Deloitte’s India Economic Outlook report. Deloitte’s report underscores the positive outlook for India’s economy, citing various factors such as consumption expenditure, export resurgence, capital flows, and the expanding middle-income demographic as key drivers of growth in the ongoing FY24-25. Anticipating that middle-to-high-income segments will make up half of all households by 2030/31, up from the current one-fourth, this trend is poised to gather momentum, thereby boosting overall growth in private consumer expenditure.
The company has revised its economic growth forecast for India in the preceding fiscal year to a range of 7.6 to 7.8 percent. This adjustment contrasts with its earlier projection in January, which estimated growth for the FY23-24 to fall within the range of 6.9 to 7.2 percent. This revision likely reflects the firm’s recognition of the accelerating pace of income growth and its consequent impact on consumer spending, thus indicating a more optimistic outlook for India’s economic performance in the specified period
“The global economy is expected to witness a synchronous rebound in 2025 as major election uncertainties get sorted out and the central banks of the West may announce a couple of rate cuts later in 2024. India will likely see improved capital flows and a rebound in exports,” said Deloitte India Economist Rumki Majumdar.
Concerns regarding inflation and geopolitical uncertainties are contributing to elevated food and fuel prices. Even after these mitigating factors, inflation is projected to remain above the Reserve Bank of India’s target level of 4 per cent throughout the forecast period, attributed to robust economic activity, according to Majumdar.
Deloitte and the World Bank may have similar outlooks due to their analysis, the RBI and other agencies might have incorporated additional factors or adopted more optimistic projections based on their assessments of various economic indicators and trends.
She noted that robust growth figures in the last two years have enabled the economy to regain ground lost during the pre-COVID period. Supported by substantial government expenditure on infrastructure, investment has played a crucial role in sustaining India’s consistent recovery trajectory.