India's Economy Gets a Taste of Consumer Love: Private Consumption's Share Of GDP Increases

India's growth is beginning to become more balanced, with the role of private consumption increasing. In the December quarter of FY25, private final consumption expenditure (PFCE) rose to 6.9% year-on-year, from 5.9% in the previous quarter. The increase in consumer spending is supporting a stronger economic outlook.

The GDP growth for FY25 is now estimated at 6.5%, marginally up from previous projections. India is expected to continue as the fastest-growing major economy in FY26 with a 6.5% growth rate, aided by strong private consumption, according to the International Monetary Fund (IMF).

This change towards growth driven by consumption is important because PFCE represented 62.0% of India's nominal GDP in September 2024 compared with 60.4% in the earlier quarter. The trend indicates a balanced and more sustainable growth cycle for the Indian economy.

Source: According to reports by Business Standard, Moneycontrol, and CEIC Data.