ECONOMIC OVERVIEW

India’s economy at the beginning of 2025 reflected a balanced mix of positive momentum and emerging headwinds. Retail inflation eased to a six-year low of 3.1%, primarily due to declining food prices, especially vegetables, indicating improved supply conditions and providing the Reserve Bank of India with greater flexibility in managing interest rates. On the fiscal front, April’s Goods and Services Tax (GST) collections were strong, reaching INR2.37 lakh crore, a 12.6% year-on-year increase, reflecting sustained domestic economic activity and improved tax compliance. However, on the macroeconomic front, S&P Global Ratings revised India’s GDP growth forecasts downward to 6.3% for FY26 and 6.5% for FY27, citing global uncertainties and softer domestic demand. Additionally, foreign exchange reserves declined slightly by US$2.0 billion to US$686 billion, likely due to currency stabilization measures and external payments. Overall, while domestic indicators remain resilient, external risks and cautious investor sentiment continue to pose challenges to India’s growth trajectory.

Despite national-level challenges, Hyderabad is poised to outperform. The city is expected to show significant economic growth rate of 9.2% in 2025—a 0.8 percentage point increase from 20241. This significantly outpaces the national average and is supported by diverse sectoral expansion and a robust consumer outlook.