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NIPFP forecasts India’s FY25 GDP growth at 7.1%

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NEW DELHI : Economic think-tank National Institute of Public Finance and Policy (NIPFP) on Friday said it has estimated India’s GDP growth at 7.1 per cent for the current fiscal, using high-frequency models.

NIPFP, in a series of tweets, said the Centre is on a fiscal consolidation path through buoyancy in taxes and revenue expenditure compression. The economic think tank said that in 2023-24, states’ capex growth is robust due to significant capex transfers from the Centre.

While the Asian Development Bank (ADB) and Fitch Ratings have estimated India’s growth at 7 per cent, the International Monetary Fund (IMF), S&P Global Ratings and Morgan Stanley projected a 6.8 per cent growth rate for FY25. IMF praises India for maintaining fiscal discipline in election year.

The International Monetary Fund has applauded India for maintaining fiscal discipline in an election year, saying that the Indian economy is doing well and continues to be the world’s bright spot.

“At this point in time, India’s economy is doing well. Growth at 6.8 per cent is very good. Inflation’s coming down. We have to make sure that inflation comes down to target and it is there on a durable basis. Macro fundamentals look pretty good,” Krishna Srinivasan, Director, Asia and Pacific Department, at the IMF told in an interview.

“One thing I would say is that maintaining fiscal discipline, especially in the election year, for me, has been quite a highlight because countries do embark on fiscal adventures in the election year.

“This government has maintained a discipline, I think, is very important because at the end of the day, sound macro fundamentals are the basis on which countries prosper and have durable growth. So that’s very important to maintain that,” Srinivasan said.

India, he said, has successfully navigated multiple shocks over the last several years. It’s emerging to be one of the fastest major economies in the world. “In fact, for this year, for 2024-25, we project growth at 6.8 per cent led by private consumption and public investment. Inflation is coming down gradually. It’s now below 5 per cent,” he said.

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