However, they
caution that growth could be constrained by factors such as uneven consumption
demand and export challenges due to global economic sluggishness.
India
Ratings highlights that current consumption demand is skewed towards
upper-income brackets, with rural consumption remaining weak. They anticipate a surge in private final consumption
expenditure to 7%
in FY25, up from 3% in FY24, potentially marking a
three-year high. The agency underscores the importance of sustained real wage
growth for a more inclusive and sustainable consumption recovery.
While private sector activity has been subdued for
several years, India Ratings sees signs of a new investment cycle emerging, as
evidenced by increased project loans sanctioned by lenders. This suggests a
potential uptick in private sector capital expenditure in the near future
India Ratings forecasts
headline inflation to moderate in FY25 but emphasizes the need
for continued vigilance from the Reserve
Bank of India (RBI). Despite the expected moderation,
monitoring inflationary pressures remains crucial for maintaining price
stability and supporting economic growth.