Page 4 - Policy Economic Report_Jan 25

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

Executive Summary

According to IMF, global growth is projected at 3.3 percent both in 2025 and 2026, below the historical
(2000–19) average of 3.7 percent. The forecast for 2025 is broadly unchanged from that in the October
2024 IMF’s World Economic Outlook (WEO), primarily on account of an upward revision in the United
States offsetting downward revisions in other major economies.

In the United States, underlying demand remains robust, reflecting strong wealth effects, a less restrictive
monetary policy stance, and supportive financial conditions. Growth is projected to be at 2.7 percent in
2025. In the euro area, weaker-than-expected momentum at the end of 2024, especially in manufacturing,
and heightened political and policy uncertainty explain a downward revision of 0.2 % point to 1.0 percent
in 2025. In 2026, growth is set to rise to 1.4 percent, helped by stronger domestic demand.

Global headline inflation is expected to decline to 4.2 percent in 2025 and to 3.5 percent in 2026,
converging back to target earlier in advanced economies than in emerging market and developing
economies.

As far as India is concerned, the National Statistics Office (NSO), Ministry of Statistics and Programme
Implementation (MoSPI), released the First Advance Estimates of Annual Gross Domestic Product (GDP)
for the Financial Year (FY) 2024-25 on 7th January 2025. The key highlights of the same are as under: -

Real GDP has been estimated to grow by 6.4% in FY 2024-25 as compared to the growth rate of 8.2% in
Provisional Estimate (PE) of GDP for FY 2023-24. Nominal GDP has witnessed a growth rate of 9.7% in FY
2024-25 over the growth rate of 9.6% in FY 2023-24. Real GVA has grown by 6.4% in FY 2024-25 over the
growth rate of 7.2% in FY 2023-24.

Real GVA of Agriculture and allied sector has been estimated to grow by 3.8% during 2024-25 as compared
to the growth of 1.4% witnessed during the last year that is 2023-24. Real GVA of ‘Construction’ sector
and ‘Financial, Real Estate & Professional Services’ sector has been estimated to observe good growth
rates of 8.6% and 7.3%, respectively during the FY 2024-25. Private Final Consumption Expenditure (PFCE)
at Constant Prices, has witnessed a growth rate of 7.3% during FY 2024-25 over the growth rate of 4.0%
in the previous financial year.

Year-on-year inflation rate based on All India Consumer Price Index (CPI) for the month of December, 2024
over December, 2023 is 5.22% (Provisional). Corresponding inflation rates for rural and urban are 5.76%
and 4.58%, respectively. Year-on-year inflation rate based on All India Consumer Food Price Index (CFPI)
for the month of December, 2024 over December, 2023 is 8.39% (Provisional). Corresponding inflation
rate for rural and urban are 8.65% and 7.90%, 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 57.9 in
January 2025.

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