“…the fundamentals of the domestic economy remain robust, with a strong external account, calibrated fiscal consolidation and stable private consumption. On the balance of these considerations, we expect that the growth in FY26 would be between 6.3% and 6.8%,” the survey said.
For FY2024-25, the economy is expected to expand by 6.4%, per government estimates on January 7, down from the previous survey’s 6.5-7% range and the RBI’s 6.6% forecast.
A manufacturing slowdown and weak capex growth has impacted the gross domestic product (GDP) in the second quarterto a near two-year low of 6.5%. With the FY25 growth at 6% in the first half of the fiscal year, the economy must expand 6.8% in the second half to meet the government’s target.
The Economic Survey 2024-25 emphasised the need for strategic and prudent policy management to navigate global challenges and strengthen domestic fundamentals. It also projected an increase in investment activity, driven by higher public capital expenditure and improving business expectations.
Inflation and food prices
Food inflation is likely to soften in Q4 of FY25, driven by a good Rabi harvest, the Survey notes, while adding the positive outlook on Rabi production is expected to contain food prices in the first half of fiscal year 2025-26. However, risks to inflation persist due to adverse weather events and rising international agricultural commodity prices.
Global political and economic uncertainties continue to present challenges to inflation management. “Risks for inflation remain due to global political and economic uncertainties,” the survey states, signalling the need for careful policy interventions to keep inflation in check.
#EconomicSurvey 2024-25 ????
Many Upsides To Domestic Investment, Output Growth & Disinflation In FY26Navigating Global Headwinds Will Require Strategic & Prudent Policy Management
Govts Focus On R&D, MSMEs & Capital Goods To Boost Long-term Industrial Growth
Expect That… pic.twitter.com/hzXfFYC5Ww
— CNBC-TV18 (@CNBCTV18Live) January 31, 2025
What is an Economic Survey?
Earlier, Finance Minister Nirmala Sitharaman tabled the Economic Survey 2024-25 in the Lok Sabha. The Economic Survey is an annual document presented by the government ahead of the Union Budget to review the state of the economy. The document also provides an overview of the short-to-medium-term prospects of the economy.
The Economic Survey is prepared by the Economic Division of the Department of Economic Affairs in the Ministry of Finance under the supervision of the chief economic adviser.
The first Economic Survey came in 1950–51, when it used to be a part of the budget documents. In the 1960s, it was separated from the Union Budget and tabled a day before the presentation of the Budget.
The Finance Minister will present the Union Budget for 2025–26 on Saturday.
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