
The latest data released by the Ministry of Statistics and Programme Implementation reveals that the gross value added (GVA) for the fiscal year 2024-25 has grown at a rate of 6.4%, a decline from the previous fiscal year. Experts attribute the lower GDP growth to a combination of factors including a cyclical economic slowdown, a strong base effect, general elections, and constraints in private sector capital expenditure.
The agricultural sector exhibited a growth rate of 3.8% in the current fiscal year, while mining and quarrying are forecasted to grow by 2.9% and manufacturing by 5.3%. Notably, the public administration, defense, and other sectors are expected to see the fastest growth at 9.1%, followed by construction at 8.6% and financial, real estate, and professional services at 7.3%.
Despite the positive uptick in private final consumption expenditure at 7.3% this fiscal year, there are concerns over slow private sector investment growth. While rural consumption has seen a recovery post favorable monsoons, urban areas are facing challenges such as high inflation and slowing credit growth, impacting overall economic performance.
Looking ahead, forecasts suggest that the growth rate for the fiscal year 2025-26 is likely to remain below 7%, with experts projecting figures around 6.5% to 6.7%. To boost growth and navigate global uncertainties, analysts emphasize the importance of public infrastructure spending, lower crude oil prices, normal monsoons, and monetary easing, while also highlighting the need for sustained domestic demand revival as a key driver for achieving a growth rate of 7% or higher in the medium term.