NSO’s first advance estimates of this year’s GDP growth suggest that the economic engine will slow to a four-year low this financial year. Representative image. |Photo courtesy: Getty Images/iStockphoto
India’s real gross domestic product (GDP) is expected to grow by 6.4 per cent in the current fiscal year, slowing from 8.2 per cent in 2023-24, the National Statistics Office (NSO) said on Tuesday (7 January 2025). This was announced in the first preliminary estimate. GDP in 2024-25. The GDP growth rate slowed to 6% in the first half of this fiscal year.
The real gross value added (GVA) of the Indian economy is also expected to rise by 6.4% in 2023-2024 compared to a 7.2% rise, with agriculture GVA growth surging to 3.8% from 1.4% last year. There is.
Apart from agriculture, the only sector where GVA growth is expected to improve this year is public administration, defense and other services, which NSO said will grow by 9.1% from 7.8% last year.
Manufacturing GVA growth is expected to almost halve from 9.9% in 2023-24 to 5.3% this year, while mining and quarrying GVA is estimated to rise by just 2.9% from 7.1% a year ago. are.
Construction’s GVA growth rate is pegged at 8.6% from 9.9% in 2023-2024, while trade, hotels, communications and broadcasting-related services, another major job-creating sector, grew from 6.4% last year. It is estimated that the growth rate will be 5.8%.
“Real GDP or constant price GDP is estimated to reach the level of Rs 184.88 crore in FY 2024-25 as against the provisional estimate of GDP of Rs 173.82 crore in FY 2023-24,” NSO said. said.
On the spending side, private final consumption expenditure is expected to expand by 4% to 7.3% from 2023 to 2024, while government final consumption expenditure is expected to increase by 4.1% from 2.5% last year.
The NSO’s first advanced estimates of GDP growth this year, which will be used in the Union Budget for 2025-26 to be released in February, show that the economic engine is at its lowest level in four years for the current financial year and Budget. This suggests a slowdown. They will need to find a way to regain growth momentum.
NSO advised those interpreting advance estimates to keep in mind that estimates are likely to be revised due to improvements in data coverage and corrections to input data by source agencies.
“Secondary advance estimates of annual GDP for FY 2024-25 and quarterly GDP estimates for October-December period of FY 2024-25 (third quarter of 2024-25) will be released on February 28, 2025.” said the country’s apex statistics agency.
According to data released in late November, India’s GDP growth rate fell to 5.4% in the July-September period of 2024, the lowest level in seven quarters. As a result, the Reserve Bank of India lowered its full-year growth forecast to 6.6% from 7.2%. Late last month, the Ministry of Finance also revised its growth forecast for 2024-25 from a range of 6.5-7% to around 6.5%.
Dharmakirti Joshi, chief economist at Crisil, said the expected slowdown in growth in 2024-25 is due to a sharp slowdown in the second quarter, reduced fiscal stimulus, higher interest rates and stricter lending standards. I mentioned it. “The second-quarter decline in government capital spending, a key driver of the post-pandemic recovery, is unlikely to be compensated for in the remainder of the fiscal year. Moreover, private sector investment remains weak despite favorable conditions. It is therefore not surprising that investment growth slowed to 6.4% in the current fiscal year from 9.0% in the previous fiscal year,” he said.
issued – January 7, 2025 4:45pm IST
