Current Affairs - Economy

The OECD has revised its GDP growth forecast for India in FY25 to 6.8%, up from an earlier projection of 6.6%. This positive outlook is attributed to strong investments, credit growth, and improved agricultural output. While export growth remains subdued, public infrastructure spending and private investment are expected to sustain growth at 6.9% in subsequent years. Notably, the business sector's profits have reached a 15-year high relative to GDP, reflecting robust economic momentum.

The OECD has raised India's GDP growth forecast for FY25 to 6.8%, up from the previous estimate of 6.7%. This revision is driven by factors such as robust public infrastructure spending, strong private investment, and a recovery in agricultural output. The growth is expected to be sustained through FY25 and FY26, supported by investment and rural income growth. Despite global economic uncertainties, India's economy is expected to remain resilient with nearly 7% growth, reflecting its strong internal economic drivers.

Morgan Stanley has adjusted its forecast for India’s GDP growth for FY25 to 6.3%, down from an earlier projection of 6.7%. This revision follows a slowdown in Q2 FY25, where growth fell to 5.4%, the lowest since March 2023, due to weak private consumption and industrial performance. Despite these challenges, the services sector showed resilience, growing by 7.1%. The recovery in the second half of FY25 is expected to be supported by government spending, rural demand improvement, and easing financial conditions. This aligns with Morgan Stanley’s expectation of an average 6.6% growth during the latter half of FY25.

In October 2024, UPI achieved a record high with 16.58 billion transactions worth ₹23.49 lakh crore, reflecting a 45% year-on-year growth. This significant increase underscores UPI's role in driving the shift toward a cashless economy by offering secure, fast, and seamless payment solutions. Operational in 7 countries, UPI, launched by NPCI in 2016, continues to enhance global digital payment adoption.

India’s Core Sector growth rebounded to 3.1% in October 2024, reflecting recovery momentum after a low of 0.1% in August. The eight core industries, contributing 40% of the industrial output, play a significant role in assessing the economic health. This improvement signals gradual stabilization, although growth remains lower compared to the robust performance in the previous fiscal year.