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India’s GDP growth during 2024-25 may turn out to be higher than 7 per cent and even close to 7.5 per cent as high-frequency indicators show resilience amid growth dynamism in the economy, according to the latest monthly economic review released by the National Council of Applied Economic Research (NCAER).

The monthly economic review for June noted that this outlook was underpinned by the buoyancy in economic activity witnessed in the first quarter, a keen policy focus on investment and growth and macroeconomic stability; and the expectations of normal monsoon.

“This outlook is underpinned by the buoyancy in economic activity witnessed in the first quarter; a keen policy focus on investment, growth, and macroeconomic stability; and the expectations of normal monsoon,” said NCAER Director General Poonam Gupta.

The Reserve Bank of India (RBI) has raised its projections for India's real GDP growth for FY25 to 7.2 per cent from 7 per cent. Growth projections have been upgraded by the World Bank, IMF and global rating agencies as well.

With inflation seemingly having peaked, monetary policy is unlikely to be tightened any further. She said that it may be eased during the year.

“The global environment seems benign as well in the absence of any known global risks so far,” Gupta added.

Gupta, however, said that taming food prices remains a challenge. “A broader policy framework may be needed to address it, including building climate-resilient food supply as also a gentle shift toward packaged and preserved food supply to bridge the periodical supply and demand gap that has become routine,” she said.

Among high-frequency indicators, growth in the Index of Industrial Production (IIP) for core industries accelerated in April 2024. Bank credit growth remained above 20 per cent despite some deceleration in personal credit growth. And, expectations of an ‘above normal’ monsoon — despite deficient rainfall in June — held out strongly for the farm sector, the report points out.

The Purchasing Managers’ Index (PMI) for both manufacturing and services kept the expansionary momentum despite slowing down a bit in May, the NCAER report added.