The Indian economy is projected to record an annual median growth of 6.4 per cent for 2024-25, the latest round of FICCI’s Economic Outlook Survey has revealed.

The forecast marks a moderation from the 7-per cent estimate (for 2024-25) put out in the previous round conducted during September, 2024. The numbers are in line with the broad expectations and reflect a notable slowdown vis-à-vis 8.2 per cent GDP growth recorded in 2023-24.

The agricultural sector, including allied activities, is expected to grow 3.6 per cent in 2024-25, according to FICCI Survey. 

The industry and services sectors, on the other hand, are projected to expand by 6.3 per cent and 7.3 per cent, respectively, in 2024-25. The first half of 2024-25 recorded a modest growth of about 6 per cent, and for the second half the survey estimates indicate a median growth of 6.8 per cent (Q3 and Q4).

Public expenditure

Economic activity is expected to witness an uptick in the second half of current fiscal supported by a revival in public capital expenditure, festive demand and normalization in industrial activity post monsoon.

The present round of FICCI’s Economic Outlook Survey was conducted in December 2024 and drew responses from leading economists, banking and financial services sector. 

CPI-based inflation has a median forecast of 4.8 per cent for 2024-25. This is in line with the RBI’s projection in the latest monetary policy announcement in December 2024. 

On the investment front, the government’s focus on capital expenditure is expected to be a key growth driver in 2025-26, FICCI Survey has said.

Investments in infrastructure and allied sectors — such as roads, housing, logistics and railways — are anticipated to further economic momentum.

Dents and bright spots

Nonetheless, downside risks remain on the horizon. Participating economists expect the private capital expenditure cycle to stay subdued, with a cautious outlook limiting large-scale capacity additions.  

Factors such as geopolitical uncertainties, uneven domestic demand, oversupply from China have kept investors on the edge. However, with deleveraged corporate balance sheets, capacity utilisation rates holding up, and uptick in demand – the momentum in private investments could build.

The median forecast for exports has been put at $450.5 billion and for imports at $729.6 billion in 2024-25.

India’s economic outlook for 2025 presents cautious optimism amidst the backdrop of persisting external headwinds, according to FICCI Survey participants. 

Consumer spending is expected to gain momentum, driven by an improved outlook for the agriculture sector, which is likely to bolster rural consumption and sentiment in the first half of the next fiscal year. 

Food inflation – which has remained elevated for over a year and strained household budgets – is expected to ease. Furthermore, monetary easing by the Reserve Bank of India (RBI), resulting in lower interest rates, could also provide an additional impetus to consumption, stated the survey.

Additionally, elevated public debt levels are a challenge and could pose a threat to fiscal sustainability. Climate-induced disruptions are increasingly impacting economies that are heavily dependent on agriculture and commodities.

Forecast

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.

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.