'Substantial risks': FICCI lowers India's FY25 GDP growth estimates to 6.4%, pegs retail inflation at 4.8%

Industry body Federation of Indian Chambers of Commerce & Industry (FICCI) has lowered FY25 GDP growth projections to 6.4% against the previous estimate 7% for the fiscal put out in September last year. In its Economic Outlook Survey, the industry said CPI based inflation has a median forecast of 4.8% for 2024-25.

The report says agricultural sector, including allied activities, is expected to grow at 3.6% in 2024-25. The industry and services sectors, on the other hand, are projected to expand by 6.3% and 7.3%, respectively, in 2024-25, according to the FICCI Economic Outlook survey.

It also pointed out that the economic activity is likely to witness an uptick in the second half of the current fiscal supported by a revival in public capital expenditure, festive demand and normalisation in industrial activity post monsoon.

“The present round of FICCI’s Economic Outlook Survey was conducted in the month of December 2024 and drew responses from leading economists representing industry, banking and financial services sector,” FICCI said in a release.

“CPI based inflation has a median forecast of 4.8% for 2024-25. This is in line with the RBI’s projection in the latest monetary policy announcement in December 2024,” it added.

“Economists were also invited to share their perspectives on key topical issues. Despite persisting uncertainties, the global economy has exhibited resilience, though growth prospects remain uneven across regions. Monetary policy normalisation continues to influence strategies in advanced economies, while the pace of disinflation varies significantly across countries,” it said.

According to the industry body, the participating economists observed global economy in 2025 to present a reasonable growth trajectory, with an underlying note of caution. “Softening price levels and ensuing monetary policy easing in some of the major economies, positive momentum in interest sensitive sectors, and continued recovery in services sectors are expected to bode well for the growth prospects this year. Furthermore, according to the survey participants, the advancements in technology, particularly in semiconductors, electronics, and artificial intelligence, alongside increased attention towards green energy transitions, are expected to catalyse investments,” it said.

“Nonetheless, substantial risks continue to cloud the global economic landscape. Rising geopolitical tensions and trade policy uncertainty pose as challenges, with the potential to fragment global trade and restrain growth. The impact of change in political leadership in the United States is yet to be seen,” it added.