New York: India’s GDP growth is projected at 7.2 per cent in 2024-25, around 7 per cent in the next fiscal, and after that, there is a strong likelihood that the growth will revert to the 8 per cent trend, said Reserve Bank of India deputy governor Michael Debabrata Patra. He was speaking at the New York Fed Central Banking Seminar organised by the Federal Reserve Bank here on Monday.

“…I do believe with all the strength of my conviction that India’s time has come,” he said, and highlighted the country heads into its future with the youngest population in the world with a median age of 28 years.

Unlike in many parts of the world, the working age population is growing — every sixth working age person is an Indian.

Patra said that since independence in 1947, India’s growth path has undergone three structural shifts with trend growth, having risen to 7 per cent during 2002-2019.

After the severe contraction during the pandemic, a new growth trajectory averaging 8 per cent seems to be forming during 2021-24, he said.

India is now regarded as the fastest growing major economy in the world.

Already the fifth largest economy in terms of market exchange rates, it is poised to become the third largest economy by 2030, the senior RBI official said and added the country is already the third largest economy in terms of purchasing power parity.

“Our projections show that India’s real GDP growth will be 7.2 per cent in 2024-25 and around 7.0 per cent in 2025-26 in a cyclical correction to the rebound from the pandemic. Thereafter, there is a strong likelihood that India’s growth will revert to the 8 per cent trend,” Patra said.

On inflation, he said it is projected to average 4.5 per cent in 2024-25 and 4.1 per cent in 2025-26.

Consumer Price Index (CPI) based inflation fell below target during July-August but rose to 5.5 per cent in September on the back of a pickup in price momentum in some food items and adverse base effects inherent in year-on-year measurement.

“Our projection indicates that these price pressures will persist in October and November before headline inflation realigns with the target from December 2024 and remains aligned in 2025-26,” the deputy governor said.

He also emphasised that India is emerging as a world leader in leveraging digital technologies for transformative change.