New Delhi: The Indian economy is projected to grow by 6.4 percent in real terms for the fiscal year 2024-25, a decrease from the 8.2 percent growth recorded in 2023-24. This figure is 20 basis points lower than the estimates provided by the Reserve Bank of India (RBI). The Ministry of Statistics and Programme Implementation published the First Advance Estimates of Annual Gross Domestic Product (GDP) for FY 2024-25 on Tuesday.
Nominal GDP is anticipated to increase by 9.7 percent in 2024-25, slightly up from the 9.6 percent growth seen in 2023-24. Real gross value added (GVA) is expected to grow by 6.4 percent in 2024-25, down from 7.2 percent in the previous fiscal year.
In terms of nominal GVA, a growth rate of 9.3 percent is projected for 2024-25, compared to 8.5 percent in 2023-24. The real GVA for the agriculture and allied sectors is estimated to rise by 3.8 percent in 2024-25, a significant increase from the 1.4 percent growth observed in 2023-24.
Real GDP is forecasted to reach Rs 184.88 lakh crore in FY 2024-25, up from the provisional estimate of Rs 173.82 lakh crore for the last fiscal year.
In the July-September quarter of the current fiscal year 2024-25, the Indian economy grew by 5.4 percent in real terms, falling short of the RBI's forecast of 7 percent. Similarly, growth in the April-June quarter was also below the central bank's expectations.
Urban consumption appears to be slowing, as ongoing inflation has adversely affected the purchasing power of the urban poor.
For India, the GDP figures for the second quarter of 2024-25, along with headline consumer price inflation, present a challenge characterized by slowing growth and high inflation. Rising food prices remain a significant concern for policymakers, who aim to achieve a sustainable retail inflation rate of 4 percent. To manage inflation, the RBI has maintained a high repo rate of 6.5 percent.
High-frequency indicators for the third quarter of 2024-25 (October-December) suggest that the Indian economy is rebounding from the slowdown experienced in July-September, bolstered by robust festival activities and a consistent increase in rural demand, as reported by the Reserve Bank of India (RBI) on Tuesday.
Fitch Ratings has adjusted its GDP forecast for India for 2024-25 to 6.4 percent, down from an earlier estimate of 7.0 percent.
This downgrade from the rating agency followed the Reserve Bank's recent monetary policy announcement, which lowered its growth forecast to 6.6 percent from 7.2 percent.
The Economic Survey presented in Parliament earlier this year conservatively estimated India's real GDP growth at 6.5-7 percent for 2024-25, while acknowledging that market expectations are more optimistic. Real GDP growth reflects the economic growth rate adjusted for inflation.
India's GDP recorded a remarkable growth of 8.2 percent during the financial year 2023-24, maintaining its status as the fastest-growing major economy. The economy expanded by 7.2 percent in 2022-23 and 8.7 percent in 2021-22.
