India's GDP growth projected to hit four-year-low of 6.4% in FY25, down from 8.2% last year: Govt estimates
By Sunita Iyer | First Published Jan 7, 2025, 4:14 PM ISTThe Indian economy is projected to grow at 6.4% in 2024-25, down from 8.2% in the previous fiscal year, according to the National Statistical Office (NSO), which released its first advance estimates for national accounts on Tuesday.
India's Gross Domestic Product (GDP) is expected to grow at 6.4% in the fiscal year 2024-25, marking a four-year low and a significant slowdown from the 8.2% growth recorded in FY24, as per government data released on Tuesday.
This projection is lower than the Reserve Bank's recent estimate of 6.6% growth for the current fiscal year, which ends in March 2025.
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In its first advance estimates of national income for 2024-25, the National Statistical Office (NSO) stated, "real GDP has been estimated to grow by 6.4 per cent in FY2024-25 as compared to the growth rate of 8.2 per cent in Provisional Estimate (PE) of GDP for FY2023-24."
Real GDP has been estimated to grow by 6.4% in FY 2024-25 as compared to the growth rate of 8.2% in Provisional Estimate (PE) of GDP for FY 2023-24, says Government of India pic.twitter.com/aL25QXv2q6
— ANI (@ANI)The data also showed that real Gross Value Added (GVA) is projected to grow by 6.4% in FY25, down from 7.2% in FY24. On the other hand, nominal GVA is expected to rise by 9.3% in FY25, slightly surpassing the 8.5% growth recorded in the previous fiscal year.
The advance GDP estimate is a key indicator for framing the Union Budget and signals a slowdown in economic activity. This forecast follows a significant decline in growth during the July-September quarter of FY24, which registered at 5.4%, catching analysts and policymakers by surprise.
The unexpected slowdown in the second quarter prompted the Reserve Bank of India (RBI) to revise its growth forecast for FY24, lowering it to 6.6% from the previous estimate of 7.2%.
Government data indicated that the agriculture and allied sectors are expected to grow by 3.8% in FY25, a significant improvement from the 1.4% growth recorded in FY24.
Additionally, the real GVA of the construction sector is projected to grow by 8.6%, while the financial, real estate, and professional services sector is expected to see a growth of 7.3% during FY25.
Private Final Consumption Expenditure (PFCE) at constant prices is forecasted to grow by 7.3% in FY25, up from 4.0% growth in the previous fiscal year, according to the government release.
"Government Final Consumption Expenditure (GFCE) at constant prices, has rebounded to a growth rate of 4.1% as compared to the growth rate of 2.5% in the previous financial year," it further added.
The figures highlight a challenging economic outlook as the government finalizes its fiscal plan for FY25. With GDP growth slowing, policymakers will face the difficult task of balancing fiscal stability while fostering economic recovery.
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