Global Economic Outlook Faces Significant Risks

Geopolitical tensions, trade policy uncertainties, and volatile commodity prices are casting a shadow over next year's growth prospects, according to a recent finance ministry report. The global trade environment is particularly affected, with the Global Trade Policy Uncertainty Index reaching a record high of 237.4 in the fourth quarter of 2024.

Domestic Drivers of Growth

Despite these challenges, India's economy is forecasted to grow by 6.5% in 2024-25, with domestic private sector investment and supportive fiscal measures playing a pivotal role. The finance ministry highlights the importance of private sector confidence in the economy's resilience and steady growth outlook.

Policy Measures to Bolster Growth

The report underscores the impact of accommodative monetary policy and the Union Budget's focus on long-term development in enhancing economic resilience. A recent 25-basis point policy rate cut and proposed changes in personal income tax structure are expected to boost disposable incomes and consumption among the middle class.