India’s economy is poised for its slowest growth in four years, with GDP expected to expand by 6.4% in fiscal 2024-25.Â
The first advance estimates, released by the Central Statistics Office just ahead of the Union Budget, signal a significant deceleration in the economic trajectory.
This projection aligns with forecasts from a Bloomberg poll of economists, pegging growth at 6.4%. The Reserve Bank of India also trimmed its outlook for the prior fiscal year, revising its earlier estimate of 7.2% to 6.6%.
Gross value added (GVA), a critical measure that excludes indirect taxes and subsidies, is expected to match GDP growth at 6.4%. Meanwhile, nominal GDP, the foundation for budget calculations, is anticipated to rise by 9.7%.Â
The agriculture and allied sectors are projected to grow by 3.8% in 2024-25, a significant recovery from the 1.4% growth recorded last year. Meanwhile, the construction sector and the financial, real estate, and professional services sectors are expected to post robust growth rates of 8.6% and 7.3%, respectively.
Private final consumption expenditure, a key indicator of consumer demand, has surged by 7.3% this fiscal, a marked improvement from the 4% growth seen in the previous year. Similarly, government final consumption expenditure has rebounded to a 4.1% growth rate, compared to 2.5% in the last financial year.
These figures set the stage for the government’s fiscal strategy, shaping critical decisions as the Union Budget looms large.Â