December 16, 2024
India's economy concluded 2024 on a high note, with business activity expanding at its fastest pace in four months, according to the Purchasing Managers’ Index (PMI) released by S&P Global. The December PMI rose to 58.1 from 58.0 in November, driven by robust demand, a thriving services sector, and resilient business confidence.
Key Growth Drivers
Surge in Services SectorThe services sector was a standout performer, fueling overall economic momentum. Increased domestic and international demand supported its growth, demonstrating the resilience of India's economy despite global challenges like geopolitical tensions and inflationary pressures.
Employment and Output GrowthCompanies reported accelerated job creation and higher output levels to meet rising consumer and business demands. The manufacturing sector also contributed, maintaining stable growth amidst global supply chain disruptions.
Business Confidence and Inflation ControlBusiness confidence surged to a five-month high, supported by policy measures that stabilized inflation and improved consumer sentiment. Firms continued to invest in capacity expansion, reflecting optimism for sustained growth in 2025.
Challenges Ahead
Despite the optimistic end to the year, economists caution that external factors such as slowing global trade and monetary tightening by major central banks could weigh on growth in the months ahead. However, India’s domestic demand is expected to remain a strong buffer.
What Experts Say
“India’s economic resilience has been exceptional in 2024. Sustained policy support and structural reforms have played a key role in maintaining growth momentum,” said Rajesh Sharma, Chief Economist at Axis Bank.
Looking Forward
As 2025 approaches, India remains on track to cement its position as the fastest-growing major economy. Analysts predict that continued infrastructure development, digital transformation, and favorable demographic trends will further bolster growth.
