NEW DELHI: India’s economy is projected to grow at 6.4% for the financial year ending March 2025, marking the slowest pace in four years. This revised forecast, released by the National Statistics Office (NSO), is below the government’s initial projection of 6.5%-7%, weighed down by sluggish manufacturing and tepid corporate investments.
Economic performance in the latter half of 2024 showed signs of strain, with weak growth, elevated inflation, subdued capital inflows, and a record trade deficit, all of which cast a shadow over the country’s economic resilience.
In December, the Reserve Bank of India downgraded its growth forecast for 2024/25 to 6.6% from 7.2% after GDP growth in the July-September quarter slowed to 5.4%, the weakest in seven quarters. However, recovery is anticipated in the second half, with growth expected to pick up to 6.7%, according to Aditi Nayar, chief economist at ICRA.
Nominal GDP, which factors in inflation, is forecast to grow by 9.7%, down from the 10.5% estimated in the 2024 federal budget. Private consumption, contributing nearly 58% of GDP, is projected to grow at 7.3% year-on-year, compared to 4% in the previous fiscal year.
Farm output, buoyed by a strong monsoon, is forecast to grow 3.8% this fiscal year, up from 1.4% last year, supporting overall growth. However, private investment growth is expected to slow to 6.4%, compared to 9% previously, while government spending is set to rise modestly by 4.1%.
Read Also:
- Bengaluru Realty in 2025: Flat Residential Demand, Rising Commercial Growth
- Russia faces economic strain amid war efforts and diminished reserves
