Page 4 - Policy Economic Report - December 2024

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

Executive Summary

According to Organization for Economic Co-operation and Development (OECD), global GDP growth is
projected to strengthen slightly to 3.3% in 2025 and remain stable at this level through 2026.

In OECD economies, GDP growth is projected to be modest relative to the pre-pandemic period, at 1.9%
in both 2025 and 2026. In non-OECD economies, aggregate growth is also anticipated to remain broadly
stable around its current pace with emerging Asia continuing to be the biggest contributor to global
growth.

Inflation in the OECD is expected to ease further, from 5.4% in 2024 to 3.8% in 2025 and 3.0% in 2026,
supported by the still restrictive stance of monetary policy in most countries. Headline inflation has
already returned to central bank targets in nearly half of the advanced economies and close to 60% of
emerging market economies. It has continued to ease in most countries through 2024, led by further falls
in food, energy, and goods price inflation.

As far as India is concerned, according to data released by Ministry of Statistics & Programme
Implementation, real GDP, or GDP at Constant Prices in Q2 of 2024-25 is estimated at ?44.10 lakh crore,
against ?41.86 lakh crore in Q2 of 2023-24, showing a growth rate of 5.4%. Nominal GDP or GDP at Current
Prices in Q2 of 2024-25 is estimated at ?76.60 lakh crore, against ?70.90 lakh crore in Q2 of 2023-24,
showing a growth rate of 8.0%.

Year-on-year inflation rate based on All India Consumer Price Index (CPI) for the month of November,
2024 over November, 2023 is 5.48% (Provisional). Corresponding inflation rates for rural and urban are
5.95% and 4.83%, respectively.

Year-on-year inflation rate based on All India Consumer Food Price Index (CFPI) for the month of
November, 2024 over November, 2023 is 9.04% (Provisional). Corresponding inflation rate for rural and
urban are 9.10% and 8.74%, respectively.

The HSBC Flash India Composite Output Index – a seasonally adjusted index that measures the month on-
month change in the combined output of India's manufacturing and service sectors registered 60.7 at the
end of the 2024 calendar year. Rising from a final reading of 58.6 in November, the latest reading
highlighted the strongest growth rate for four months. There were quicker increases in output at both
goods producers and service providers. Demand for Indian goods and services continued to improve in
December, as seen by a sharp increase in new orders that was the most pronounced since July 2024.

On the external front, India's foreign exchange reserves fell by nearly $2 billion to an almost six-month
low of $652.87 billion as of Dec. 13, according to data from the Reserve Bank of India (RBI). The central
bank stated that the forex reserves increased by USD 6.4 billion during 2024-25 so far to USD 652.87 billion
on December 13, 2024. In the week that ended December 13, the foreign exchange reserves declined by
USD 1.988 billion to USD 652.87 billion. According to RBI, India's foreign exchange reserves (Forex) are
sufficient to meet the more than 11 months of imports and about 96 per cent of external debt outstanding
at end-June 2024.

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