India’s economy forecast to grow 6.3%-6.8% in 2025/26, sources say

NEW DELHI: The Indian government’s economic report, coming a day ahead of the annual budget, is likely to project GDP growth of 6.3%-6.8% in 2025-26, according to two sources familiar with the matter.

The forecast suggests economic conditions will remain sluggish next year.

Growth is expected to slip to 6.4% in the current financial year - the slowest in four years - from 8.2% last year.

The economic survey will be released later on Friday. A spokesperson for the finance ministry did not immediately respond to an email from Reuters.

Early economic growth projections have a patchy record of accuracy.

However, this year’s growth estimate of 6.4% lands close to India’s Chief Economic Adviser V.

Anantha Nageswaran’s and his team’s initial projection of 6.5%-7%.

Prime Minister Narendra Modi, in his third term’s first full budget, is likely to provide policy boost for the world’s fifth-largest economy where high prices and tepid wage growth have crimped spending power in a blow to consumption.

Economists expect policy changes aimed at strengthening consumption and tariff cuts to encourage local manufacturing as ways to boost growth.

L&T drives early gains in India’s benchmark indexes

Finance Minister Nirmala Sitharaman will present the budget for the next fiscal year on Feb. 1 at 0530 GMT.

A weaker manufacturing sector and slower corporate investments are seen dragging India’s growth to 6.4% in 2024/25.

The growth slowdown amid global volatility has wiped out a recent stock market rally.