
India is anticipated to witness a slowdown in economic growth, with GDP expected to increase by 6.4% in the fiscal year 2024-25. This forecast, released by the Central Statistics Office just before the Union Budget, signals a notable deceleration in the country's economic performance. The Reserve Bank of India has also revised its outlook for the previous fiscal year, lowering its initial estimate from 7.2% to 6.6%.
The Gross Value Added (GVA), a crucial indicator that excludes indirect taxes and subsidies, is projected to mirror GDP growth at 6.4% for the upcoming fiscal year. Additionally, nominal GDP, which forms the basis for budget calculations, is forecasted to increase by 9.7%. Sectors like agriculture and allied activities are expected to show growth of 3.8%, marking a significant recovery from the 1.4% growth recorded in the previous year. The construction sector and the financial, real estate, and professional services sectors are also anticipated to exhibit robust growth rates of 8.6% and 7.3%, respectively.
Consumer demand indicators are showing improvement, with private final consumption expenditure surging by 7.3% in the current fiscal year compared to 4% growth in the previous year. Government final consumption expenditure has also rebounded with a growth rate of 4.1%, up from 2.5% in the last financial year. These numbers are significant as they will influence the government’s fiscal strategy and play a crucial role in shaping key decisions as the Union Budget approaches.