With GDP expected to grow by 6.4% in FY 2024-25, India’s economy is poised for its slowest growth in four years.
The first advance estimates, released by the Central Statistics Office just ahead of the Union Budget, indicate a significant slowdown in economic growth.
The estimate is in line with forecasts in a Bloomberg poll of economists, with a growth rate of 6.4%. The Reserve Bank of India also lowered its outlook for the last fiscal year, revising its earlier estimate of 7.2% to 6.6%.
Gross value added (GVA), an important measure that excludes indirect taxes and subsidies, matched GDP growth at 6.4%. Meanwhile, nominal GDP, the basis of budget calculations, is expected to grow by 9.7%.
Agriculture and allied sectors are projected to grow at a rate of 3.8% in 2024-25, a significant recovery from the 1.4% growth recorded last year. Meanwhile, the construction sector and the financial, real estate, and professional services sectors are expected to post strong growth rates of 8.6% and 7.3%, respectively.
Private final consumption expenditure, a key indicator of consumer demand, rose 7.3% this fiscal year, a sharp improvement from last year’s 4% growth. Similarly, government final consumption expenditure reached a growth rate of 4.1% as against 2.5% in the previous fiscal.
These figures set the stage for the government’s fiscal strategy, shaping important Union Budget decisions at large.
