India’s GDP growth to hit four-year low of 6.4% in FY25: NSO
Manufacturing growth is expected to decline to 5.3% from 9.9% last fiscal, while services are estimated to grow at 5.8%, down from 6.4% in 2023-24. However, agriculture is likely to see a rebound with 3.8% growth, up from 1.4% in the previous year.
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India’s economic growth is forecasted to slow to a four-year low of 6.4% in the fiscal year 2024-25, according to data released by the National Statistics Office (NSO) on Tuesday. The projected growth rate is below the government’s initial estimate of 6.5%-7% and the Reserve Bank of India’s December forecast of 6.6%.
The gross domestic product (GDP) growth rate of 6.4 per cent will be the lowest since the Covid year (2020-21) when the country witnessed a negative growth of 5.8 per cent. In FY 2023-24 GDP growth rate was 8.2 percent.
The slowdown is attributed to weaker performance in the manufacturing and services sectors, coupled with high inflation, subdued capital flows, and a record trade deficit. Manufacturing growth is expected to decline to 5.3% from 9.9% last fiscal, while services are estimated to grow at 5.8%, down from 6.4% in 2023-24. However, the agriculture sector is likely to see a rebound with 3.8% growth, up from 1.4% in the previous year.
Nominal GDP or GDP at Current Prices is estimated to attain a level of ₹324.11 lakh crore in the FY 2024-25, against ₹295.36 lakh crore in 2023-24, showing a growth rate of 9.7%. Per capita income is expected to rise by 8.7% to ₹2,00,162. The data will inform the upcoming Union Budget, scheduled for February 1. According to current projections, the size of the Indian economy is $3.8 trillion during 2024-25.
Economists have expressed concerns about domestic and global uncertainties impacting future growth. While the government is expected to boost capital expenditure in the Budget, challenges such as inflation and slowing urban credit growth could weigh on recovery.
