India’s Gross Domestic Product (GDP) is projected to grow by 6.4% in 2024-25, according to the Ministry of Statistics’ first advance estimates. This marks a noticeable slowdown from the 8.2% growth seen in FY23. Despite a weaker start to FY25, the ministry is optimistic about a rebound in the second half of the fiscal year, driven by a pickup in agricultural and industrial activities as well as strong rural demand. The forecasted growth range for the year is between 6.4% and 6.8%.
Nominal GDP is expected to grow by 9.7%, showing a slight increase from 9.6% in the previous year. The agricultural sector has shown significant recovery, with Real Gross Value Added (GVA) growth projected at 3.8%, a notable increase from 1.4% in FY23. Construction is another sector showing positive signs, with Real GVA expected to grow by 8.6%. Financial services, real estate, and professional sectors are set to expand by 7.3%.
Private Final Consumption Expenditure (PFCE) is set to rise by 7.3%, marking a strong recovery from the 4% growth in the previous fiscal year. This rise indicates an improvement in consumer confidence and spending power. Additionally, Government Final Consumption Expenditure (GFCE) has also improved, with an expected growth of 4.1%, up from 2.5% last year.
The Reserve Bank of India (RBI) has also updated its forecast for GDP growth in FY25, now predicting a 6.6% increase, citing slower growth in the first half of FY25 but expecting a recovery in the latter half. This recovery will be supported by rural consumption and strong export activity in the services sector.
