India’s Gross Domestic Product (GDP) is expected to grow at 6.4% in FY2024-25, a significant slowdown from the 8.2% growth recorded in the previous fiscal year, according to the government’s first advance estimates released on Tuesday.
This projection represents the lowest growth rate in four years and is also below the Reserve Bank of India’s (RBI) forecast of 6.6% for the current fiscal year ending in March 2025.
The National Statistical Office (NSO) reported that real GDP growth for FY 2024-25 is estimated at 6.4%, a decrease from the provisional estimate of 8.2% for FY 2023-24. Alongside GDP figures, real Gross Value Added (GVA) is projected to expand by 6.4% in FY25, down from 7.2% in FY24. Nominal GVA, however, is expected to see a 9.3% growth, slightly surpassing the 8.5% increase recorded in the previous year.
These first advance estimates provide crucial insights into the economic outlook and will inform the government’s upcoming Union Budget. The GDP slowdown, particularly noticeable in the July-September quarter of FY24, where growth was just 5.4%, caught analysts and policymakers by surprise. This prompted the RBI to revise its growth forecast for FY24 down to 6.6%, from its earlier estimate of 7.2%.
Sector-wise, the agricultural and allied sectors are projected to see a growth of 3.8% in FY25, a significant recovery compared to the 1.4% growth in FY24. The construction sector is expected to grow by 8.6%, while the financial, real estate, and professional services sectors are forecast to expand by 7.3%.
Private Final Consumption Expenditure (PFCE) is anticipated to grow by 7.3% in FY25, a notable increase from the 4.0% growth in the previous year. Government Final Consumption Expenditure (GFCE) is also expected to rebound, with a growth rate of 4.1%, up from 2.5% in FY24.
