S&P Global Forecasts Robust Growth

S&P Global Forecasts Robust Growth for Indian Economy, Expects 6.7% Annual Average till 2031

New Delhi: S&P Global, a leading financial intelligence agency, projects a robust average annual growth rate of 6.7% for the Indian economy until March 2031. 

This growth will be propelled by thriving manufacturing and services exports, along with robust consumer demand. Despite short-term challenges posed by rate hikes and a global economic slowdown, S&P remains optimistic about India's economic trajectory.
The agency maintains its earlier forecast of 6% growth for the ongoing fiscal year, ending in March 2024. Notably, even at this rate, India is poised to emerge as the fastest-growing economy within the G20 nations. In its report titled 'Look Forward: India’s Moment,' S&P Global emphasizes India's potential to seize a defining opportunity amid a world marked by transition and uncertainty.

S&P Global envisions India's economy expanding from $3.4 trillion in FY2023 to $6.7 trillion. This growth trajectory could elevate per capita GDP to around USD 4,500. If realized, India would surpass both Japan and Germany, securing the third-largest global economy position.

The report underscores India's gains from tax reforms, state-backed digital and physical infrastructure initiatives, and reduced leakages from government subsidy transfers. The manufacturing sector is poised for new avenues, benefitting from global supply chain diversification trends and government incentives.

Furthermore, the report highlights the government's proactive stance in semiconductor manufacturing, through partnerships with global industry leaders. Establishing a robust logistics framework is identified as pivotal for India's transformation from a services-driven economy to a manufacturing-centric one.

S&P Global underscores the significance of enhancing female workforce participation to unlock the demographic dividend. By 2031, the Indian consumer market is expected to double, surging to $5.2 trillion from $2.3 trillion in 2022. This growth will be driven by rising household incomes and increased expenditures on essentials, including food.

Higher per capita incomes are projected to fuel discretionary spending in entertainment, communications, restaurants, and hospitality sectors. S&P Global's comprehensive analysis underscores India's potential to harness these growth factors, navigate challenges, and emerge as a major global economic player in the coming years.

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