Recovery on Track
Experts predict that India's economic revival will be well underway by late 2025. Key drivers include government initiatives, RBI's rate cuts, and the
anticipated easing of global trade headwinds. These measures are expected to boost domestic demand, with signs of recovery potentially visible around September-October of the current year.
RBI's Influence
The Reserve Bank of India's (RBI) monetary policy plays a crucial role in this recovery. Further rate cuts by the RBI are anticipated, possibly including another cut in the October policy meeting. The effects of these cuts typically take a few months to fully impact lending rates, leading to a positive effect on growth by late 2025.
Global Trade Impact
While domestic demand is expected to rise, the global trade slowdown presents a challenge. This slowdown is expected to affect private investment, potentially causing growth to slow to around 6% by the quarter ending December. A recovery is expected to begin from the first quarter of 2026, due to the lagged impact of policy easing.
Inflation and Rates
Managing inflation is a key priority. GST rationalization is expected to help ease inflation, which should be seen positively. The US Federal Reserve's (Fed) decisions are also crucial, depending on upcoming jobs data. Any rate cuts by the Fed could influence the bond market and global financial flows, highlighting a delicate balance.
India-China Trade
The article sheds light on the India-China trade dynamics. The challenge lies in identifying products India can export to China, as well as the equipment and components needed to boost manufacturing. A more balanced trade relationship is vital for India's economic growth. Increased trade is an important factor for the country's economic future.
