India economic outlook 2024: Experts weigh in on growth, interest rates, and rupee

The Indian economy grew a solid 6.5% in 2023, outpacing most major economies. However, the road ahead may be bumpy given the weak global economic outlook, according to economists who shared insights with CNBC-TV18 on their estimates of GDP, interest rates and the rupee.

Samiran Chakraborty, Chief India Economist at Citi, predicts a modest 50 basis points (bps) drop in GDP growth rate for India in the fiscal year 2025. Citi's global economists forecast a drop in global growth from 2.7% in 2023 to 1.9% in 2024, affecting India's growth rate.

Santanu Sengupta, Chief India Economist at Goldman Sachs, attributed the lower growth forecast of 6.5% for fiscal year 2025 to a fiscal drag. He noted optimism in US growth but emphasised the impact of fiscal policies on India's economic prospects.

Sakshi Gupta, Deputy Vice President and Sr. Economist at HDFC Bank, echoed these sentiments, projecting a growth rate of 6.3% for the upcoming year. Gupta anticipated a slowdown due to the global economic downturn and foresees a fiscal drag affecting India's economic performance.

Gupta anticipates a tight monetary policy for at least the first half of the year. Even if rate cuts are implemented in the latter part of the year, they are expected to be gradual. The tight monetary stance, coupled with global economic challenges, is likely to exert pressure on India's growth prospects.

Neeraj Gambhir, Group Executive and Head-Treasury, Markets, and Wholesale Banking Products at Axis Bank, foresees a range-bound bond market with stable rates. Despite potential fluctuations in deposit rates, a generally stable rate regime is expected.

Sakshi Gupta further suggested that once the election uncertainty subsides, the second half of the fiscal year might witness more broad-based signs of private capex revival. This indicates a potential turnaround in economic sentiment and investment patterns.