India's GDP Growth Projected To Sharply Decline To 6.4% In FY25 From 8.2% In FY24

Marking a sharp decline recorded in financial year (FY) 24, India’s Gross Domestic Product (GDP) in the fiscal year 2024-25 is projected to grow at 6.4% , according to first advance estimates released by the government. The projection of growth is at the slowest in four years, suggesting weaker consumption and muted exports.  The growth rate of GDP for FY 2023-24 was at 8.2 %.

The government release on Tuesday stated that the GDP for FY24-25 has been estimated to grow by 6.4% in FY 2024-25 as compared to the growth rate of 8.2% in the Provisional Estimate (PE) of GDP for FY 2023-24. The release also added that nominal GDP has witnessed a growth rate of 9.7% in FY 2024-25 over the growth rate of 9.6% in FY 2023-24.

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Notably, the projection is lower than the recent Reserve Bank estimate of 6.6 percent for the current fiscal year ending March 2025.

The release highlighted that the real GVA has grown by 6.4% in FY 2024-25 over the growth rate of 7.2% in FY 2023-24. Nominal GVA has shown a growth rate of 9.3% in FY 2024-25 as compared to the growth rate of 8.5% in FY 2023-24, while the real GVA of the agriculture and allied sector has been estimated to grow by 3.8% during 2024-25 as compared to the growth of 1.4% witnessed during the last year, i.e., 2023-24.

“Real GVA of the ‘Construction’ sector and ‘Financial, Real Estate & Professional Services’ sector has been estimated to observe good growth rates of 8.6% an7.3%, respectively,7.3%, during FY 2024-25,” the release underscored, noting that the Private Final Consumption Expenditure (PFCE) at Constant Prices has also witnessed a growth rate of 7.3% during FY 2024-25 over the growth rate of 4.0% in the previous Financial Year.

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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, added the release.

The projection of the GDP growth echoes the concerns recurrently raised by Congress regarding the reduced private consumption and lower demand due to the alleged inflation.