Leading rating agency, Investment Information and Credit Rating Agency (ICRA), in its latest outlook, predicted India’s real GDP growth to be 0.3 per cent down from the preceding financial year’s growth of 6.5 per cent.
Pegging the country’s GDP for 2025-26 at 6.2 per cent, the agency also forecast the fiscal deficit to be 4.4 per cent of the GDP for 2025-26, with the current account deficit projected at 1.2 per cent to 1.3 per cent during the same period.
Real Gross Value Added (GVA) growth is also expected to ease to 6 per cent from 6.4 per cent.
While GDP determines the total value of goods and services produced within the country, GVA is the total value of goods and services produced minus the cost of intermediate goods and services used in production.
Regarding inflation, the Consumer Price Index (CPI) is expected to be above 3.5 per cent, while the Wholesale Price Index (WPI) will be over 1.8 per cent for the current fiscal, the report added.
While Rabi cash flows and above-normal reservoir reserves will aid rural demand, services exports will outpace merchandise exports.
With food inflation decreasing, bank rate-cuts leading to lower EMIs, and sizeable income tax relief in the Union budget for 2025-26, household disposable incomes are expected to receive a boost.
The Centre's capital expenditure is budgeted to rise by 10.1 per cent in 2025-26, which will boost investment activities, the report added.
However, private capital expenditure may gain some traction on the face of a muted outlook for exports and uncertainty around trade policies, it said.
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