Jayaswal Neco Industries Ltd Management Discussions

Economic Overview

Global Economy¹

The global economy maintained moderate growth through CY 2024, expanding at a pace of 3.3%, consistent with the previous year. This performance reflected a complex operating environment marked by persistent geopolitical tensions, elevated inflation levels, and increasing trade restrictions. While global activity remained resilient in the face of these challenges, the overall momentum was constrained by tightening financial conditions, weakening cross-border investment flows and policy uncertainty in major economies.

A key development shaping the macroeconomic landscape in CY 2024 gradually changing global interest rates. Following years of low interest rates, advanced economies began witnessing a sustained increase in long-term government bond yields. This shift, which began with policy tightening by central banks, is now being driven by changes in market expectations and an increase in global term premiums. Although real interest rates are expected to stabilise over time, the path forward will depend on how inflation and trade frictions evolve globally.

Inflation showed signs of moderation during the year, supported by easingRsenergy prices and tighter monetary policy across both advanced and emerging economies. Global headline inflation averaged 5.8% in CY 2024, easing from 6.8% in CY 2023 and 8.7% in CY 2022, while core inflation remained sticky; the IMF projects a further decline to 4.4% in CY 2025. However, it remained above central bank targets in many regions. Adding to the fragility of the recovery are evolving global trade dynamics. The rise in tariffs and the proliferation of non-tariff barriers have led to a notable slowdown in global trade growth. These disruptions have not only weakened global value chains but have also dampened business sentiment and long-term investment decisions in export-oriented sectors, such as manufacturing and basic materials, including steel.

The outlook for CY 2025 is marked by continued caution. According to the IMF, global GDP growth is projected atRs2.8%Rsin CYRs2025, followed by a modest improvement to 3.0% inRsCY 2026. This downward revision of 50 basis points from the growthRsof CY 2024 reflects the cumulative impact of newRsprotectionist measures, uncertainty in policy directionRsandRsweaker-than-expected momentum in key economies. Global inflation is expected to trend downward, allowing central banks some room to ease monetary policy in a gradual and calibrated manner. The IMF projects global inflation at 4.3% in CY 2025 and 3.6% in CY 2026, down from 5.0% in CY 2024. Advanced economies are likely to experience slightly higher inflation than initially anticipated, while inflation expectations in emerging and developing economies have moderated. This subdued outlook is broad-based, affecting both advanced and emerging economies. In the United States, growth is expected to decline to 1.8% in CY 2025, marking a full percentage point decline from CY 2024, as higher interest rates and fiscal tightening weigh on domestic demand. In contrast, Indias growth remains comparatively strong at 6.2%, underpinned by domestic consumption and investment activity. Other economies, such as South Africa and parts of Europe, have seen their forecasts lowered due to weak carryover effects from CYRs2024 and continued policy uncertainty.

Indias economy remained resilient through FY 2024–25, with real GDP growth estimated at 6.5%, following a strong 8.2% expansion from FY 2021-22 to FY 2024-25. ThisRsgrowth was supported by healthy agricultural output, early signs of recovery in manufacturing, and continued momentum in theRsservices sector. Rural consumption showed strength, aided by favourable monsoon conditions and targeted policy support. India became the fourth-largest global economy in 2025, reflecting the impact of sustained reforms under the Aatmanirbhar Bharat vision and the countrys strengthening global positioning. It remains the worlds fastest-growing major economy, with real GDP growth at 6.5% and nominal GDP tripling from Rs 106.57 lakh crore in FY 2014–15 to Rs 331.03 lakh crore in FY 2024–25.

conditions and adequate reservoir levels. Kharif food grain production was estimated at a record 1,647.05 lakh metric tonnes, 5.7% higher than the previous year and 8.2% above the five-year average, bolstering rural incomes and demand. The government maintained its commitment to fiscal consolidation, with the fiscal deficit estimated at 4.8% of GDP for FY 2024-25, projected to reduce further to 4.4% in FY 2025-26.

The manufacturing sector showed signs of early revival, supported by rising business confidence, stable input costs, and improved logistics performance. Service remained the main driver of growth, contributing approximately 55% to Indias Gross Value Added (GVA), with increased focus on high-value and technology-driven services. This structural tilt towards services and high-skill employment contributed to the resilience to the broader economy.

The macroeconomic environment remained broadly stable during the year. A declining fiscal deficit, strong external sector performance, easing inflation, and continued policy emphasis on capital formation contributed to sustained domestic demand. Improved employment opportunities, increased formalisation, and the governments focus on structural reforms have further supported the economys growth trajectory.

The agriculture sector expanded by 3.8% in FY 2024-25, driven by a strong Kharif harvest, favourable weather

Source: MoSPI Press Note, Economic Survey 2024-25 Summary, IBEF

Inflation moderated significantly during FY 2024–25, with retail inflation averaging 4.6%, well within the Reserve Bank of Indias tolerance band of 2–6%. This marked the lowest level since FY 2018–19 and underscored the effectiveness of the RBIs monetary policy approach in balancing growth and price stability. The easing of supply-side pressures and improvements in logistics and food supply chains further contributed to stabilising pricesRsand supporting consumer sentiment.

Source: Ministry of Finance, MoSPI